India-Pakistan Trade Halt! Which Items Will Get Costlier?- Islamabad To Take Major Blow

In response to the recent terrorist attack in Pahalgam, Jammu and Kashmir, that claimed the lives of innocent tourists, India has taken a decisive step by suspending all remaining trade relations with Pakistan. The move, announced this week, comes amidst the sharpest deterioration in bilateral ties between the two neighbours in recent years and marks a complete economic disengagement following years of declining commerce.

Trade between India and Pakistan has seen a consistent fall since the Pulwama attack in 2019, when India imposed a 200 per cent duty on Pakistani imports. According to official trade data, bilateral trade fell from over Rs 4,370 crore in 2018–19 to just Rs 2,772 crore in 2019–20 through the Attari Land Port. By 2023–24, Indian exports to Pakistan had reached USD 1,180 million, while imports from Pakistan were just USD 2.88 million.

India’s Ministry of Commerce data shows that trade with Pakistan accounts for less than 0.06 per cent of India’s total trade, underscoring New Delhi’s low dependence on goods from across the border. Meanwhile, Pakistan is facing soaring inflation, dwindling forex reserves, and increasing reliance on IMF loans—making Indian imports vital to several of its sectors.

A wide range of goods were exchanged in the now-suspended trade. India imported from Pakistan items like watermelon, muskmelon, cement, rock salt, dry fruits, optical items, and Multani mitti. In contrast, India's exports included essential goods such as fruits, vegetables, tea, spices, pharmaceuticals, plastics, dairy products, and motor parts.

Economic experts suggest that Pakistan stands to lose far more from the trade halt. “The disruption further isolates Pakistan economically at a time when its financial systems are under stress,” said a senior trade analyst at the Indian Council for Research on International Economic Relations (ICRIER), requesting anonymity due to diplomatic sensitivity.

Moreover, India’s firm stance is part of a broader diplomatic and security recalibration following cross-border terror attacks. “This is not merely an economic decision—it sends a strong political message that terrorism and dialogue cannot go hand-in-hand,” a government source familiar with the matter told The Hindu.

While the impact on Indian markets is expected to be marginal, a temporary spike in prices of certain items like dry fruits and rock salt could occur. However, alternative trade partners and domestic supplies are likely to offset the gap in due course.

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