Indian goods worth Rs 8538984500000 reach Pakistan without crossing border amid frozen trade through…

On February 14, 2019, a terror attack was carried out in Jammu and Kashmir’s Pulwama, resulting in the death of 40 CRPF jawans. After the deadly attack, India-Pakistan tensions escalated, with New Delhi hiking duties on Pakistani goods to 200 percent and removing its most favoured nation (MFN) status. Still, millions of dollars of Indian goods reach Pakistan without crossing the international border. According to GTRI, one of the popular methods is third-country transshipment via global ports like Dubai, Singapore, and Colombo.

GTRI states that goods from India sent to Dubai, Singapore and Colombo and stored in bonded warehouses. As the goods are in storage – still duty-free – their labels and documents are changed.

“The products are re-exported to Pakistan under a new ‘country of origin’—say, UAE instead of India,” Srivastava, the founder of GTRI said.

Notably, this system, which is actually a loophole, bypasses the trade restriction and also provides better prices even after re-export markups. This system allows for plausible deniability of official trade, while commerce continues informally.

As per GTRI, Indian goods, including auto parts, worth USD 100,000 shipped to Dubai. These goods then relabeled and re-exported to Pakistan for USD130,000.

“While not always illegal, this grey-zone strategy highlights how trade adapts faster than policy,” Srivastava said.

“Supply chains bend, not break—especially when there’s demand on the other side,” he added.

India’s exports to Pakistan from April to January 2024-25 totaled approx USD447.65 million, resulting in a significant trade surplus. While India imported only USD42 million worth of goods from Pakistan during the same period, the Georgia Tech Research Institute (GTRI) estimates the total value of goods reaching Pakistan from various sources to be over USD10 billion.

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