Pakistan’s central bank has said that trade between Islamabad and New Delhi plummeted significantly this fiscal, apparently due to the ongoing tensions with India over the Kashmir issue.
The State Bank of Pakistan data in the first half of 2019-20 fiscal starting from July 1 showed that Pakistans exports to India during the period came in at an insignificant $16.8 million as compared to $213 million in first half of 2018-19, Dawn news reported.
But the declining trade across the border had not affected the balance of trade which was still heavily skewed in favour of India, it said.
Meanwhile, imports from India also fell to $286.6 million as against $865 million in the same period. As a result, Pakistan’s trade deficit with the eastern neighbour amounted to USD 269.8 million.
India on August 5 revoked the special status to Jammu and Kashmir and bifurcated the state into two Union Territories, evoking strong reactions from Pakistan which has been trying to internationalise the issue.
Pakistan reacted by downgrading diplomatic ties with New Delhi and banning trade with India.
The ties have not recovered from the jolt and trade and commercial activities have suffered.
The central bank data showed that imports from China the country’s largest trade partner fell to USD 4.8 billion during July-December versus USD 5 billion in same period last year.
However, exports slightly rose to $936 million, up from $889 million in the first half of 2019-20. This meant a trade balance with China at a negative $864 billion.
With the second-largest partner, the United Arab Emirates, there was some improvement as exports to the Gulf country increased to $827m in the period, from USD 638 million. This was driven by a significant decline in imports to USD 3.6 billion, down from USD 5 billion.
Pakistan has succeeded to drastically reduce the current account deficit mainly through cut in imports bill, which is also reflected in the above-mentioned two cases.