Pak-India Trade Relations: From Rivalry to Friendship

This paper was presented in an International Conference, “Socio Economic and Cultural Relations between Pakistan and India” University of the Punjab, Lahore, Pakistan (25th-27th November, 2016)Syed Wasif Azim was a visiting scholar in the Jackson School.Pakistan and India are two neighboring countries, whose inhabitants share a long history and have many commonalities, but relations between both the countries have been strained by different activities and issues since birth of the two. Like other relations the Trade relations between Pakistan and India have never been good and productive since last six decades. This has hampered the economy of Pakistan and India, and has contributed a lot to the increasing level of poverty in both the countries. Using the lens of commercial peace theory, this study explores that Trade relations between Pakistan and India need a revival to combat the economic problems of the people on both sides of the border. Also it argues that trade, in spite of its economic benefits will contribute to peace between the countries and the region. It explains that there is a long list of issues contributing to this situation, needing focus to achieve the target of peaceful trade relations. This study focuses only three important of these i.e. Chabahar Port Project verses Gawadar Port, Most Favored Nation status (MFN) issue and Regional Politics involved in this regard. Furthermore this paper will give a list of suggestions important for improving the present status of Pak-India trade relations. It subsequently argues that both the countries shall enhance bilateral trade to foster peace in the region, as is advocated by commercial peace theory