India, Pak Trade Up

Indo-Pak relations are at an all-time low. But trade between the two is going strong.

- Anilesh S. Mahajan

On August 15, Prime Minister Narendra Modi announced a shift in the country’s strategy to tackle Pakistan by raising the issue of human rights violations in Balochistan and Pakistan- Occupied Kashmir or POK. The aim was to counter Pakistan’s interference in Kashmir and its backing of the insurgency there. However, in faraway Mumbai, cotton traders were working out the nitty-gritties of shipping cotton to Pakistan. The reason – cotton production in Pakistan has fallen 35 per cent this year and imports from India turn out to be much cheaper than from Australia and Africa. Incidentally, Pakistan was the largest buyer of Indian cotton in the 2015/16 season (October-September). It bought 2.5 millon bales (one bale is 170 kg); India's total cotton exports were 6.5 million bales. Traditionally, the biggest buyer of Indian cotton has been China. However, this year, things are different, partly due to the economic slowdown there and partly due to its textile exports becoming less competitive due to rising wages and other factors.

Terms of Trade