Pakistan's India trade puzzle: Imports see massive 69% jump despite ban

Pakistan imported goods worth Rs 5,876 crore from India in the first quarter of the 2026-27 fiscal year. However, India imported no goods from Pakistan. If direct trade remains suspended, how are Indian goods reaching Pakistan?Pakistan recorded no exports to India during the same period (Reuters)New Delhi,Oct 27, 2026 12:11 ISTWhile direct trade between India and Pakistan has remained suspended since the 2025 Pahalgam terror attack, the latest figures suggest Indian goods continue to be in great demand in Islamabad. Pakistan imported goods worth $61.74 million (Rs 5,876 crore) from India in the first quarter of the 2026-27 fiscal year, up 69% from $36.55 million (Rs 3,478 crore) in the same period last year, according to a Dawn report. However, Pakistan recorded no exports to India during the same period.The striking surge in imports of Indian goods to Pakistan raises an obvious question. If direct trade between the two countries remains suspended, how are Indian goods reaching Pakistan? The data, compiled by the State Bank of Pakistan, does not answer that. Experts suggest that the goods are likely being routed via third countries such as the UAE and Singapore.PAKISTAN'S IMPORTS FROM INDIA JUMP 69%Geopolitical expert Ravinder Singh Robin said the data points to continuing demand for Indian goods in Pakistan. "If direct trade is suspended, what route are these goods taking, and how are their country of origin and source being recorded? Could some be reaching Pakistan through third countries?" Robin tweeted. "If the demand is significant, shouldn't Islamabad consider what it would take to restore normal relations - including credible action on terrorism and the alleged use of Pakistani soil by terrorist groups?" he further said.Pharmaceutical products are Pakistan's key imports from India. Until March 2025, India's pharma exports to Pakistan amounted to $208 million, as per a Reuters report. Other key goods include plastic, petroleum, dyes, organic chemicals, rubber, coffee, tea, vegetables, spices, dairy products and cereals.However, after India's decision to close the Wagah-Attari border, the only land port through which trade was permitted, bilateral trade now stands at near zero. The move came after Pakistan-based Lashkar terrorists brutally killed 25 tourists in Pahalgam last year, sparking a three-day conflict.The incident has led India to reinforce its hardline position that "terror and trade cannot go together".Since then, India has banned the direct or indirect import or transit of goods originating in or exported from Pakistan. On May 4, Pakistan also suspended all trade with India, including via third countries.However, despite the ban, Indian goods seemed to have found a way across the border.In fact, between July and September 2025, weeks after Operation Sindoor, Pakistan imported goods worth $36.6 million from India, according to a report in Arab News, which cited State Bank of Pakistan data. The imports were almost entirely pharmaceutical raw materials. Both India and Pakistan hav banned direct or indirect imports of goods since April 2025 (AFP) HOW ARE INDIAN GOODS LANDING IN PAKISTAN?So, how are these goods landing in Pakistan despite a trade ban?According to geopolitical expert Robin, the goods are likely being routed via third countries to bypass restrictions and avoid scrutiny. These products are then re-labelled, commanding higher prices.According to the think tank Global Trade Research Initiative (GTRI), unofficial Indian exports to Pakistan are likely to be $10 billion a year. The key re-routing hubs are Dubai, Colombo, and Singapore.GTRI founder Ajay Srivastava, in a LinkedIn post, called it the "grey-zone strategy". Here, goods are rerouted by taking them to facilities where they are transferred to other ships to avoid international trade curbs."Indian goods are sent to Dubai, Singapore, and Colombo. The goods are then stored in bonded warehouses in transit hubs. While in storage - still duty-free - the documents and labels are changed. The products are re-exported to Pakistan under a new 'country of origin' – say, UAE instead of India," Srivastava said.Trade ties between India and Pakistan have been in free fall since 2019. In 1996, India bestowed Pakistan with the 'Most-Favoured Nation' (MFN) status. That status was revoked in 2019 following the Pulwama attack, where a suicide bombing killed 40 soldiers.From 2018 to 2024, India-Pakistan bilateral trade fell from $2.41 billion to $1.2 billion. Exports of Pakistani goods to India also nosedived from $547.5 million in 2019 to just $480,000 in 2024. Key Pakistani exports included glassware, copper, sulphur, fruits and nuts.From April 2024 to January 2025, the last full pre-ban period, India exported $447.65 million, while Pakistan's exports stood at just $0.42 million.However, as the latest figures show, despite the ban, Indian goods continue to be in great demand in Pakistan.- Ends