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yesterday

Indian Goods Worth $10 Billion Enter Pakistan Annually Despite Trade Bans

Firms leverage third-country routes and bonded warehouses to bypass restrictions, as India and Pakistan's trade ties hit new lows following the Pahalgam terror attack.

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Despite restrictions, $10 billion in Indian goods slip into Pakistan each year via backdoor trade: GTRI study

Overview

  • Indian goods valued at over $10 billion are routed annually into Pakistan through ports in Dubai, Singapore, and Colombo, according to GTRI estimates.
  • Exporters use bonded warehouses to alter labels and paperwork, disguising Indian-origin products as originating from other countries like the UAE.
  • This transshipment system operates in a legal grey area, allowing businesses to circumvent direct trade bans and sell goods at premium prices in Pakistan.
  • India closed the Attari Integrated Check Post and suspended the SAARC Visa Exemption Scheme after the Pahalgam attack, while Pakistan responded by halting all trade ties.
  • Despite formal trade restrictions, the rerouted trade highlights the resilience of economic incentives and the limitations of government controls.