Pakistan lifts ban on cotton and sugar imports from India, trade between the two countries set to resume

Trucks carrying goods stuck at the border town of Chakothi in Pakistan Occupied Kashmir, three km from the Line of Control , after the Pulwama attack in February 2019.

In a major development, India and Pakistan are all set to resume trade after a break of 19 months. The development follows a noticeable overture for peace between the two countries which began in February when the militaries of the two countries announced a ceasefire across the Line of Control (LoC) and all other sectors.

Pakistan’s Economic Coordination Committee approved the import of cotton yarn from India until June. This announcement was made by Muhammad Hammad Azhar, the country’s Finance Minister, at a briefing in Islamabad today. Pakistan has also agreed to purchase 500,000 tons of sugar from India, Azhar said.

Trade between the two countries deteriorated after India withdrew the Most Favoured Nation status to Pakistan following the Pulwama attack in February 2019 in which 40 Indian soldiers were killed.

In August 2019, after India unilaterally withdrew the special status of Jammu and Kashmir, Pakistan downgraded diplomatic relations and suspended bilateral trade with India.

Since the announcement of the ceasefire in February, however, the Prime Ministers of the two countries have expressed their desire to establish peace and called for creating an enabling atmosphere for peace to flourish. General Qamar Bajwa, Pakistan’s Army chief, even said that it was time to “bury the past”.

On March 24, Hardeep Singh Puri, Minister of State for Commerce and Industry, signalled that India was willing to resume trade with India: “India desires normal relations, including on trade, with all countries, including Pakistan. Pakistan unilaterally suspended bilateral trade with India in August 2019. It is for Pakistan to review its unilateral measures on trade.”