Pakistani-Indo relations to flourish in future trade?

Pakistan has recently opened up trade with India with whom they have had much conflict with over the Kashmir territory since the two states were created in 1947. Even though Pakistan hasn’t granted India Most-Favored-Nation status Pakistani exports to India have increased tremendously in the last year. According to the “commercial intelligence and statistics of the ministry of commerce & industry” Pakistani exports to India grew 66% from April till December 2012. Exports reached over $460 million, compared with $277 million during the same period 2011.

If this trade relationship continues to flourish and expand then we can assume that military tensions will subdue. History has shown us that two countries involved in trade are less willing to go to war as they have much at stake. War is generally less beneficial than the continued trade and economical benefits of trade for both nations. Both nations in 2012 also signed agreements agreeing to “customs cooperation, mutual recognition of standards and redressal of trade grievances”. If this bilateral trade continues we can expect to see less tension over the Kashmir territorial dispute and perhaps even a better friendship develop between these two states.

One Response to “Pakistani-Indo relations to flourish in future trade?”

  1. patrickmccleary says:

    While I agree with this author, I would like to add an additional point: even when trade ties are down and tensions are high between India and Pakistan, there is still the incentive for trade to keep tensions from escalating into all-out conflict. For example, after the most recent border tensions along the Line of Control that saw five soldiers get killed, trade was immediately frozen between the two countries. At this point, tensions were very high, and obviously trade was basically zero because of its status as “frozen.”
    However, since that time, the two countries have been successfully able to restart trade, and tensions have gone down significantly from where they were in the aftermath of the most recent LoC dispute. It is likely that the incentives to trade had a major impact on that progress. As the article and arguments posted by the initial author argues, trade and interdependence have acted as a confidence building measure in India-Pakistan relations because of the mutually beneficial nature of increased trade. These two countries now fully understand the benefits of increased trade with each other, which means that even when trade is frozen, it still functions to prevent conflict, because it is in the interest of neither side.

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