Pak. loses $7 bn. by avoiding India goods [IR, Economy]
- Pakistan suffered a loss of about $7 billion in 2014 by importing items from other countries at a higher cost instead of sourcing them from India.
- Loss was substantial considering Pakistan’s GDP was only about $270 billion.
- ‘Costs of Non-Cooperation’ occurs when a country imports from the global market at prices higher than the price at which the same product is available from the regional market, and thereby incurs an additional foreign exchange expenditure on such imports.
- Many products that Pakistan imported from third countries were at least three times more costly than the price of the same item from India in export markets.
- Pakistan is a net-importing nation with a trade deficit of $22 billion in 2015. In 2015, it imported around $44 billion, while it exported only items worth $22 billion. India-Pakistan trade is far below potential and negligible.
- Trade between both nations in 2015-16 was just $2.6 billion, while according to various estimates the annual bilateral trade has the potential to surpass $20 billion if both countries cooperate and remove barriers and restrictions.
- Currently, most of the trade happens indirectly through Dubai, Singapore, port of Bandar Abbas (Iran).