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India Pakistan Trade Possibilities and Non-tariff Barriers


  • Nisha Taneja

    () (Indian Council for Research on International Economic Relations)


This paper aims to identify the bilateral trade possibilities and non-tariff barriers between India and Pakistan. The study shows that there is a large untapped trade potential between the two countries. Using the potential trade approach, the study finds that the export potential from India to Pakistan is to the tune of US$ 9.5 billion while that from Pakistan to India is US$ 2.2 billion. Items having export potential from Pakistan are largely in the textile sector while items having export potential from India are predominantly in non-textile sectors. Very few items having export potential from India are on the positive list adopted by Pakistan. At the same time there are several items that India is importing from other countries but not from Pakistan. This indicates that there is a huge information gap on both sides on items that can be imported by India from Pakistan. A working definition of non-tariff barriers adopted in the study included six major categories, namely, quantitative restrictions, trade facilitation and customs procedures, technical barriers to trade and sanitary and phytosanitary measures, financial measures, para-tariff measures and visas. The study was based on an extensive survey conducted in several cities in India and Pakistan. Further, despite the two countries having liberalized their import regimes, Pakistan continues to follow a positive list approach towards Indian imports. The study identifies the ways in which this policy impedes India's exports and recommends the dismantling of the positive list. It also identifies problems related to transportation, custom procedures, rules of origin certification and valuation and suggests measures to address them. The imposition and application of standards in India was perceived as a major non-tariff barrier by Pakistani exporters. The study found that even though the TBT and SPS measures are not discriminatory across trading partners, Pakistani exports to India are surely affected by these. Pakistan has an export interest in textiles and agricultural products which also happen to be sectors where import restrictions/standards are most rigorously applied by India. It also found that due to a restrictive visa regime only selected traders have access to trade-related information. Thus lack of transparency, market imperfections and information asymmetries on both sides raise transaction costs and restrict market access for several other aspiring traders.

Suggested Citation

  • Nisha Taneja, 2007. "India Pakistan Trade Possibilities and Non-tariff Barriers," Indian Council for Research on International Economic Relations, New Delhi Working Papers 200, Indian Council for Research on International Economic Relations, New Delhi, India.
  • Handle: RePEc:ind:icrier:200

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    References listed on IDEAS

    1. L. ALAN WINTERS & NEIL McCULLOCH & ANDREW McKAY, 2015. "Trade Liberalization and Poverty: The Evidence So Far," World Scientific Book Chapters,in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 14, pages 271-314 World Scientific Publishing Co. Pte. Ltd..
    2. Koo, Won W. & Taylor, Richard D. & Mattson, Jeremy W., 2003. "Impacts Of The U.S.-Central America Free Trade Agreement On The U.S. Sugar Industry," Special Reports 23069, North Dakota State University, Center for Agricultural Policy and Trade Studies.
    3. Tongeren, Frank van & Meijl, Hans van & Surry, Yves, 2001. "Global models applied to agricultural and trade policies: a review and assessment," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 26(2), November.
    4. Ashok Gulati, 2002. "Indian Agriculture in a Globalizing World," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(3), pages 754-761.
    5. Valenzuela, Ernesto & Hertel, Thomas & Keeney, Roman & Reimer, Jeff, 2005. "Assessing Global CGE Model Validity Using Agricultural Price Volatility," GTAP Working Papers 1875, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    6. Schmitz, Andrew & Schmitz, Troy G. & Seale, James L., Jr., 2003. "Ethanol from Sugar: The Case of Hidden Sugar Subsidies in Brazil," Policy Briefs 15679, University of Florida, International Agricultural Trade and Policy Center.
    7. Burfisher, Mary E., 2001. "The Road Ahead: Agricultural Policy Reform In The Wto -- Summary Report," Agricultural Economics Reports 34067, United States Department of Agriculture, Economic Research Service.
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    More about this item


    Trade; Trade policy; non-tariff barriers; South Asia; India Pakistan and International Relations;

    JEL classification:

    • F1 - International Economics - - Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F5 - International Economics - - International Relations, National Security, and International Political Economy

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