Destination EU and USA: Improving Export Potential of Pakistan by Trading with India

This paper is the extension of popular work of Murshed and Mamoon(2010) that suggests that India Pakistan proximity to global trade can significantly mitigates conflict between these two nations. The paper analyses bilateral trade patterns between India Pakistan with its major exporting destinations in a simple OLS framework. It finds that if bilateral trade between two nations increases that will improve exports of Pakistan in US, EU and UAE. This finding has significant implications for improvement of ties between the two countries. Furthermore, trading with India also full fills Pakistani Government’s emphasis on Trade not Aid. This aspect of India Pakistan trade has not been investigated before