Dubai is expected emerge as the ‘official’ transit port for Indian exporters to route their products to Pakistan, after Pakistan’s decision on Wednesday to suspend trade with India, officials of Indian trade and exporters associations have said.
Pakistan Prime Minister Imran Khan on Wednesday decided to suspend trade relations with India in a five-point plan, in response to India’s move to end special status for Jammu & Kashmir and split it into two union territories.
“The suspension of trade with India is only on movement of goods through Wagah boarder or direct shipment. It will not affect trade through Dubai and our exports will now have to be routed through Dubai,” Rajesh Sethia, General Secretary of Amritsar Chamber of Commerce, told Arabian Business.
“This would mean our exports to Pakistan will become much more costly now, as goods will have to travel through Mumbai, Dubai and Karachi before they reach the Punjab and other areas of Pakistan. Earlier, the goods could be send to these areas in Pakistan, which are just across the boarder, through Wagah boarder,” Sethia, who is also the managing director of Amritsar-based J Kishore Exports, said.
Sethia, whose company is a leading exporter to Pakistan, said the trade suspension will hurt Pakistan more than India, as India’s imports from Pakistan had almost dried up after Indian government imposed 200 percent import duty in the wake of the Pulwama attack.
India mainly exports chemical goods, grocery items, garments, machinery items and tyres to Pakistan.
Federation of Indian Exporters Organisations (FIEO) President Sharad Kumar Saraf said the suspension of trade relations will affect Pakistan more “as India is less dependent on Pakistan while latter is more.”
“India's goods exported to Pakistan has limited profile as Pakistan has not given MFN status to India and such goods have ready market in South Asia and Middle East" Saraf added.
A retired Secretary to Government of India, who also served in a senior position in the commerce ministry, however, told Arabian Business that the Dubai route for trade between India and Pakistan has always been thriving, even when trade relations were normal between the two countries.
“It was estimated that only one-third of India’s exports to Pakistan were routed through direct shipments or Wagah boarder and two-thirds of the trade between the two countries have been taking place through Dubai,” the ex-senior bureaucrat said.
India’s exports to Pakistan were to the tune of $452.5 million, while imports were only a paltry $7.13 million in the first half of the current fiscal.
India-Pakistan trade was about $2.5 billion in 2018-19, with India’s exports to Pakistan at $2.06 billion and imports at $495 million.
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