A Border Too Close for Business: The Case of Indo-Pak Trade

by: Nyle Murad, Arifa Zahoor

Date: March 12, 2025

Trade between India and Pakistan has repeatedly been derailed by conflict, and a deep-seated trust deficit, that has kept bilateral trade at the margins of both economies. In August 2019, in response to India’s abrogation of Article 370, Pakistan suspended all trade, effectively halting economic ties between the two nations. Now almost six years later, official trade is at an all-time stalemate, with informal exchanges continuing through third countries like Dubai and Singapore. Despite decades of setbacks, the economic logic of trade between both countries remains compelling. Geographical proximity offers potential for lower costs, shorter supply chains, and access to vast consumer markets—benefits that remain unrealized in the absence of political will.