Dynamics of Bilateral Merchandise Trade between India and Pakistan: A Comprehensive Analysis (2001-till date)
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Date
2025
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Journal of the International Economics
Abstract
The objective of the paper is to analyse the bilateral merchandise trade relationship between India and Pakistan during the period 2001 to 2022. The study examines growth, trade concentration and compositional change in the trade basket using UNCTAD trade classification of the products at HS-06. The Herfindahl Index (HI) suggests a trend towards diversification of products exported to Pakistan over time, with some fluctuations and the contribution of the top 10 products provide insights into the concentration of exports, with periods of both high concentration and diversification observed over the 22-year period. The study inferred that a Few sections consistently dominate the export basket. However, the variability across sections and years indicates changing trade patterns influenced by economic, political, and social factors affecting both countries. The study evidently suggests India’s export strategy of moving away from primary commodities and toward more manufactured goods. The study highlights significant changes in India’s import patterns from Pakistan as well. While earlier years showed a more diversified import basket, recent years indicate a strong concentration on a few products. from chemical and allied industries (S-06) and textiles and related articles (S-11) while other sections remain consistently low or fluctuate minimally.
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Keywords
India-Pakistan Trade, Trade Composition, Trade Concentration, UNCTAD Trade Classification