Even as Pakistan seeks a $6 billion bailout from the IMF for mere survival, it has decided to suspend trade relations with India in a move, which, ironically, will hurt Pakistan itself much more than it will hit India. Pakistan took this decision as retaliation to India revoking the provisions of Article 370 from the state of Jammu & Kashmir. Pakistan depends on India to a large extent for its cotton imports. India accounts for more than one-third of Pakistan’s total cotton imports, which will soon stop due to its own move. Pakistan also depends on India for its organic chemicals imports. India accounts for around 12 per cent of Pakistan’s organic chemical imports, which the nation will not get anymore from its neighbour.
As far as India’s dependence on Pakistan is concerned, major items that India imports from Pakistan are salts, fruits, and nuts. However, the share of Pakistan in India’s imports of these items is only 2-3 per cent. Pakistan’s decision will cut it off from the Indian market where it sells 1.86% of its total exports. However, the same makes very little difference to India as Pakistan accounts for a mere 0.6 per cent of India’s total annual exports, according to the Department of Commerce. India is in a trade surplus of $1.66 billion with Pakistan.
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At a time when Pakistan is struggling to get through its mounting current account deficit, cutting its trade ties with India does not appear to help the nation to get into a better position. Previously, India had taken away the most-favoured nation status from Pakistan after the terrorist attack in Pulwama that killed 40 CRPF personnel in February. India also imposed duty up to 200 per cent on imports from Pakistan.