Patriotism vs commercial interests
New Delhi’s actions in India-held Kashmir are despicable. There can be no two opinions about it. Short of war, it behoves Pakistan to take every action possible to show solidarity with struggling Kashmiris.
But does it follow that those actions are practical?
Bilateral trade is heavily tilted in favour of India with our imports five times more than our exports. And that is without accounting for informal trade that is estimated to be about twice that of formal trade. On the face of it, it appears that the ban on trade with India makes as much economic sense as political sense, especially given Pakistan’s beleaguered trade balance.
But the reality is far more convoluted than simple trade numbers or knee-jerk emotional responses.
The real picture
“The tops of many bottles, such as paint or medicine, have a polymer-based material, which is on the list of items not importable from India. Practically speaking, however, almost all that is available in the market is sourced from India,” said a trader on condition of anonymity.
“Indian companies have set up shop in Dubai, which they show as Chinese. When an order is booked and processed, its paper work indicates that the product’s origin is China. It’s a fairly open secret all along the chain. And this is not the only product, there are many others on the banned list that are imported in a similar manner,” he said.
Another importer explained the use of switch bill of lading in importing from India through Dubai. “It is only paper,” he said candidly. “The original bill of lading is for some party in Dubai. Through a switch bill of lading, the consignment shifts to our name with the country of origin no longer India.”
When it comes to small-scale firms that cannot shift vendors or absorb extra costs, commercial interests may supplant patriotism
“We will shift imports to China,” said a third importer with patriotic fervour. However, he too conceded that while he supported the trade ban and would opt to source materials from elsewhere, there were some raw materials he would have to import from India via the United Arab Emirates.
Talking about the practicality of the ban, he pointed out that several Indian companies had plants all across the world. One could be importing from Africa or Germany, but the company manufacturing the consignment would have its headquarters in India.
“We import from three different companies in India. Since the trade ban, six to seven of our orders have been cancelled,” narrated an importer and distributor. Imports from India include reactive textile dyes, 80pc of which are coming from New Delhi as they cost less and have easy raw material availability. Other imports consist of food flavours since the Indian taste profile is similar to ours and their technology is more advanced, he explained.