The economic think tank Global Trade Research Initiative (GTRI), amid the ongoing India-Pakistan tensions, said that the Indian goods worth over $10 billion are reaching Pakistan every year indirectly through ports such as Dubai, Singapore, and Colombo, bypassing trade restrictions.
GTRI said that Indian firms send goods to these ports, where an independent company offloads the consignment and keeps the products in bonded warehouses, where goods can be stored without paying duties while in transit.
“In the bonded warehouse, the labels and documents are modified to show a different country of origin. For example, Indian-made goods may be relabelled as ‘Made in UAE’. After this change, they are shipped to countries like Pakistan, where direct trade with India is not allowed”, according to the report.
This method, he said, helps firms to bypass India-Pakistan trade restrictions; sell goods at higher prices, using the third country route; and avoid scrutiny, since the trade appears to come from other countries. In a separate development, reports have said that the Pakistani health authorities have initiated “emergency preparedness” measures to secure pharmaceutical supplies in response to the suspension of trade ties with India.
Pakistan relies on India for 30 per cent to 40 per cent of its pharmaceutical raw materials, including Active Pharmaceutical Ingredients (API) and various advanced therapeutic products. The report by Geo News has said that the Drug Regulatory Authority of Pakistan (DRAP) has confirmed that while there has been no formal notification regarding the ban’s impact on the pharmaceutical sector, contingency plans are already in place.
“Following the 2019 crisis, we had started preparing for such contingencies. We are now actively looking at alternative avenues to meet our pharmaceutical needs,” the report quoted a senior DRAP official as saying. After the Pulwama terror attack in 2019, the two-way trade between India and Pakistan was already minuscule following steps taken by both sides. In April-January 2024-25, India’s exports to Pakistan stood at $ 447.65 million, while imports were meagre $0.42 million. Exports and imports in 2023-24 were $ 1.18 billion and $2.88 million, respectively.
