Pakistan formally suspends trade ties with India

Imports from Pakistan declined by 92% to USD 2.84 million in March 2019 compared to USD 34.61 million in March 2018.

Islamabad: Pakistan has formally suspended its trade relations with India after New Delhi revoked Jammu and Kashmir's special status.

On Friday, the federal cabinet headed by Prime Minister Imran Khan endorsed the decisions taken by the National Security Committee and the joint session of parliament, which include suspension of trade ties with India, the Dawn reported.

Trade relations between the two neighbors were already strained following the Pulwama terror attack as India imposed 200 percent customs duty on all goods imported from the neighboring nation.

India-Pakistan trade

Imports from Pakistan declined by 92 percent to USD 2.84 million in March this year compared to USD 34.61 million in March 2018, according to the commerce ministry data. During the January-March period of 2018-19 fiscal, imports from Pakistan declined by 47 percent to USD 53.65 million.

Two notifications were issued soon after the cabinet meeting to implement the decision to suspend bilateral trade with India with immediate effect and until further orders, the report said.

One notification suspends all kind of exports to India, while the other banned import of goods of Indian origin or those imported from it. Earlier, this ban was only limited to imports from Israel with which Pakistan has no trade ties at all.

Pakistan's imports have already entered negative growth with almost all countries, except India, as Islamabad mostly imports raw materials from India, the report said.

According to a data of Indian Council for Research on International Economic Relations (ICRIER), the total exports from India to Pakistan in the financial year 2018-2019 was around USD 2 billion. The major items exported by India include chemical products and textiles among others, and the imported items include mineral products and vegetable items.

On Monday, India revoked Article 370 to withdraw the special status to Jammu and Kashmir and bifurcated the region into two Union Territories - Jammu and Kashmir, and Ladakh.

Pakistan has also suspended the Lahore-Delhi friendship bus service from Monday after it halted two cross-border trains.

In reaction to India's move, Pakistan on Wednesday downgraded diplomatic ties with India by expelling Indian High Commissioner Ajay Bisaria and announced that it would also suspend trade relations with New Delhi.

India has said Jammu and Kashmir was an integral part of India and the issue was strictly internal to the country.

Pakistan has also suspended the import of Indian goods under the Pak-Afghan transit treaty, Special Assistant to the Prime Minister on Information Firdous Ashiq Awan told a media briefing on Friday.