Although official trade figures between Pakistan and India are very low, the reality is quite different. Experts and reports reveal that a significant amount of commerce up to $10 billion annually takes place through HIDDEN TRADE, back-door channels. Officially, both countries have drastically reduced their trade since 2019, due to rising diplomatic tensions, border restrictions, and visa bans. According to official data, during the 2024-25 period, India exported only $447 million worth of goods to Pakistan, and Pakistan’s exports to India were just about $420,000. These figures show minimal formal trade, but they don’t tell the whole story.
According to a research report by the Global Trade Research Initiative (GTRI), the actual trade volume between Pakistan and India is much higher through unofficial channels. This covert trade is believed to be around $10 billion annually. How is this possible in a situation where official restrictions are tight? The answer lies in routes through third countries like Dubai, Singapore, and Sri Lanka. Indian goods are shipped to these nations, relabeled with local branding, and then exported to Pakistan. Similarly, Pakistani products are rerouted through these countries to avoid restrictions and reach Indian markets covertly.
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Many experts argue that this black-market trade is essential for meeting the demands of millions of consumers and businesses in both countries. Despite diplomatic disagreements and bans, there remains a strong cultural and economic connection that motivates such trade. Goods that are unavailable due to restrictions or tariffs are imported via these third countries, often at higher profit margins. This practice helps businesses survive and grow, and consumers get access to products that might otherwise be difficult to find.
Furthermore, this hidden trade often involves essentials like textiles, electronics, and food products, which are in high demand. It also provides a crucial revenue stream for traders involved in these clandestine transactions. While governments aim to control or curb such trade, experts believe that complete prohibition is unlikely due to deep-rooted cultural ties, shared markets, and ongoing demands.
In summary, despite official figures indicating minimal trade, Pakistan and India are engaged in a massive, secret economic exchange that keeps their economies interconnected. This informal trade, though risky and illegal, remains resilient, driven by necessity and longstanding ties between the people of both nations. As diplomatic relations remain tense, this hidden trade is likely to continue, reflecting the complex and intertwined relationship beyond official boundaries.
