India-Pakistan trade ban remains, but Pakistani imports from India surge 69% in first quarter of FY27
Pakistan’s imports from India rose by nearly 69 per cent in the first quarter of the 2026-27 financial year, even as direct trade between the two neighbouring countries remains suspended.
Islamabad imported goods worth $61.74 million (around Rs 5,876 crore) from India between July and September, compared with $36.55 million (around Rs 3,478 crore) in the corresponding period last year, according to a report by Dawn citing State Bank of Pakistan data.
Interestingly, Pakistan recorded no exports to India during the three-month period. The figures raise questions about how Indian goods are reaching Pakistan despite restrictions imposed by both countries following the Pahalgam terror attack in April 2025.
Experts believe third-country trade hubs, including the United Arab Emirates (UAE), Singapore and Sri Lanka, could be facilitating the movement of these goods.
How are Indian goods reaching Pakistan?
India shut the Wagah-Attari border crossing, the only land route permitted for bilateral trade, after the Pahalgam attack, in which 26 people were killed.
New Delhi subsequently prohibited the direct or indirect import and transit of goods originating in or exported from Pakistan.
Islamabad announced a suspension of all trade with India, including through third countries, on May 4, 2025.
Despite these restrictions, Indian products appear to be finding their way into the Pakistani market. Experts suggest that traders could be routing goods through intermediary countries, where shipments may be stored, repackaged or documented before being exported to Pakistan.
The Global Trade Research Initiative (GTRI) has described this practice as a grey-zone trading strategy.
The GTRI has estimated, as cited by India Today, that unofficial Indian exports to Pakistan could amount to $10 billion annually.
However, the latest Pakistani import figures alone do not establish the precise routes taken by these shipments or confirm whether restrictions have been bypassed.
Pharmaceuticals among key Indian exports
Pharmaceutical products and raw materials are among the major Indian goods reaching Pakistan. According to a Reuters report, India's pharmaceutical exports to Pakistan had reached $208 million by March 2025.
Other products traded between the two countries include plastics, petroleum products, dyes, organic chemicals, rubber, coffee, tea, vegetables, spices, dairy products and cereals.
Trade ties remain strained
India-Pakistan trade relations have deteriorated steadily since 2019, when New Delhi withdrew Pakistan's Most-Favoured Nation status following the Pulwama terror attack that killed 40 Indian security personnel.
Bilateral trade declined from $2.41 billion in 2018 to $1.2 billion in 2024. Pakistan's exports to India also plunged from $547.5 million in 2019 to just $480,000 in 2024.
The latest figures underline the continued demand for Indian products in Pakistan despite the political and security tensions. However, with both governments maintaining restrictions, the extent and routes of this trade remain unclear.
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