1.9. Trade

♤ Trade relations remained vibrant for an extended period after Partition. As noted by former Pakistan commerce secretary Zafar Mahmood, in 1948-49, India accounted for around 56% of Pakistan’s total exports and 32% of its total imports. Indeed, despite the hostilities of 1948, India remained Pakistan’s largest trading partner until 1955-56.

♤ The trade relationship took a nosedive with the 1965 and 1971 wars, and only resumed, on a limited scale, after the Shimla Agreement was signed in 1972.

♤ India unilaterally accorded Most Favoured Nation (MFN) status to Pakistan in 1996. There is increased question mark on this in recent years.

♤ Withdrawing MFN status to Islamabad could mark an important – even if symbolic –♤ Pakistan’s total import from South Asia itself is less than 4 per cent.