Islamabad

Despite a brief military conflict and the continued closure of borders, trade between Pakistan and India persisted in May, primarily through a third country.

The official data showed that imports from India reached a three-year high during July-May FY25, Dawn reported quoting the data of the State Bank of Pakistan (SBP).

It showed that imports from India totalled USD 211.5 million in the first 11 months of FY25 — surpassing USD 207m in FY24 and USD 190m in FY23.

In May alone — when the four-day conflict broke out in the first week—imports stood at USD 15 million, slightly down from USD 17 million in the same month last year.

However, Pakistan’s exports to India remained negligible.

In May, exports to India were recorded at just USD 1,000, while total exports during July-May FY25 were only USD 0.5 million.

In FY24 and FY23, exports stood at USD 3.44 million and USD 0.33 million, respectively—highlighting the highly one-sided nature of bilateral trade.

Formal trade relations between Pakistan and India have suffered since 2019. However, after the April 22 Pahalgam terror attack that claimed 26 lives, India took a series of measures, including immediate shutting down of the Attari land-transit post, used for movement of certain kinds of goods.

In retaliation, Pakistan too announced that “all trade with India, including to and from any third country through Pakistan, is suspended forthwith.”

Traders were reluctant to discuss the continuation of imports during the tense period. However, one trader suggested: “It may have come from a third country and the payment for the May imports would have been made before the war.”

Although official data reflects limited trade, some research institutions claim the actual trade is far higher. “India’s unofficial exports to Pakistan are estimated at USD 10 billion annually, routed primarily through Dubai, Colombo, and Singapore,” Dawn said quoting a research body.

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Analysts said the unofficial trade remains robust due to Pakistan’s high cost of production and industrial dependence on foreign inputs. “We should not ignore smuggling from India since the cost of production in Pakistan is the highest in the region, which creates space for goods from India, China, and Bangladesh,” said an exporter.