Open AccessPakistan-India Trade Potential and Issues
Author(s) -
Zareen F. Naqvi
Publication year - 2009
Publication title -
the lahore journal of economics
Language(s) - English
Resource type - Journals
eISSN - 1811-5446
pISSN - 1811-5438
DOI - 10.35536/lje.2009.v14.isp.a9
Subject(s) - international trade , politics , south asia , economics , international economics , free trade , international free trade agreement , world trade , development economics , trade barrier , business , political science , law , sociology , ethnology
Pakistan and India are the two largest economies in South Asia withvery low levels of bilateral trade. This has been the result of border disputesand political tensions, but also of inward-looking import-substitution growthstrategies. Trade (including official and unofficial) between the two countriesstood at around US$ 2.5-2.6 billion in 2007/08 but it could potentially be asmuch as US$ 5-10 billion or two to four times its current levels. TheComposite Dialogue Process (CDP) has led to substantial improvements inpolitical relations over the last 5 years and trade relations have shown positiveoutcomes as well. This paper recommends that the process be strengthenedfurther by restarting the stalled CDP, Pakistan granting most favored nation(MFN) status to India, continuing to reduce impediments to trade and tradelogistics, and perhaps even considering the possibility of a free trade agreement(FTA) with India.