LAHORE - Trade activities between Pakistan and India have slowed down in current fiscal year of 2017-18, as the bilateral trade between the two rival nations has dropped to $1.25 billion from $2.4 billion of five years ago in 2013.

Sources in trade and industry said that Pakistan and India are presently doing a total bilateral trade of around $5 billion annually most of which is done via Dubai, besides unofficial trade across the Line of Control (LoC) on Srinagar-Muzaffarabad Road which is not documented.

They said that bilateral trade between Pakistan and India has felt the heat of mounting tension between the two arch rivals, as the cross-border movement of truckloads through Wagah-Attari route has nosedived.

According to the Pakistan Customs officials, the number of trucks crossing over from India has reduced significantly to just 4-2 from the normal routine of 150 truckloads due to non-tariff barriers from Pakistan including, Customs checking, Rangers inspection and close investigation of phytosanitary quarantine department. However, the number of truckloads going from Pakistan to India is almost constant in the range of about 100, officials said.

They said that Pakistan Rangers has created an atmosphere of high alert, with vigorous investigation of all consignment from Indian side since 2016. As a result, the volume of export from India is sharply dropping for the last couple of years.

Saarc Chamber of Commerce and Industry vice president Iftikhar Malik said that Pakistan is presently exporting textile industry chemicals, finished glass and finished fabrics with high value addition.

He observed that Pakistan industry particularly in Punjab has enhanced its capacity in view of catering Indian Punjab's market. Now Pakistan has increased its export to India through value addition. Earlier, it was sending traditional items of dry dates, gypsum, cement and raw fabrics. After keeping in view of the demand of Indian Punjab, the Lahore, Gujranwala and Faisalabad industry has developed itself, installing new machinery and enhancing capacity to add more value to their products.

Appreciating the restoration of 2003 ceasefire agreement by the senior Pakistani and Indian military officials Iftikhar Malik said trade and other issues should be dealt separately and nothing should disrupt business activities between Pakistan and India.

It is to be noted that an understanding was reached between the Pakistan and Indian director generals of military operations who made a special hotline contact to review the prevailing situation, ensuring peace and avoidance of hardships to the civilians along the borders.

Urging the NLC authorities to build a separate road for trade activities at Wagah border, the Saarc CCI vice president informed that bilateral trade was reached the highest level of $2.4b, which could further increased to $6b in limited period if both countries decided to treat each other equally. On the contrary this trade volume is lowered to $1.25b annually now.

Currently, most of the trade between India and Pakistan takes place via Dubai and its volume is estimated at over $4 billion, he added.

Iftikhar said that efforts of both the governments should be focused on implementing the roadmap agreed upon by the two countries in September 2012 for bilateral trade promotion.

He said that presently, India's para-tariffs and non-tariff barriers mainly restrict market access for Pakistani exporters, specifically of textile, agriculture and automobiles.

All Pakistan Vegetable and Fruit Market Dealers Association President Amin Bhatti said that cotton and cotton yarn is still largest import from India due to low crop in Pakistan.

While on the other hand exports of Pakistani items has increased because of increased demand of Pakistan gypsum, cement and dry dates in Indian market.

He claimed that now Pakistan has put non-tariff barriers in place for Indian exporters, as it is vigorously involving phytosanitary quarantine department to check the quality of food items coming from India.

He added that most of the consignments were rejected and wasted at the border and dozens of shipments forced to return back after health related checking in 2016.

LCCI Standing Committee on Pak-India Trade Promotions Aftab Vohra said that for the last two and a half year, the government has not issued quarantine certificates to importers to bring food items from India through Wagha.

He said that it is the government stance that instead of relying on imports from India it would look at the domestic growers to increase production and keep prices under control.

He said trade through Wagha-Attari needed to be expanded with improvement in ease of doing business by various essential steps such as streamlining of customs procedures, harmonizing standards, and improving testing and quarantine facilities.

In 2012, Pakistan abolished the positive list containing only 1,956 tradable items and enforced a negative list of 1,209 untradable items. Pakistan was expected to abolish the negative list by December 2012, but the deadline was missed due to Indian reluctance to address Islamabad's concerns about non-tariff barriers.

Indo-Pak Chamber of Commerce and Industry (IPCCI) President SM Munir said that trade in the region constitutes only 1.3 percent of the total world imports and 1.2 percent of exports, whereas merchandise trade is only 27.9 percent of GDP, the lowest in the world. South Asia is the least integrated region in the world.

He said that from the last couple of years, the bilateral trade is averaging around 2 billion dollars whereas it is estimated that India and Pakistan have a potential for trade of 20 billion dollars.