India-Pakistan Trade Continues Despite ‘Operation Sindoor’ Tensions
• ‘Operation Sindoor’ Fallout Fails to Halt Trade
• India’s Exports to Pakistan Hit 3-Year High
Unmesh Gujarathi
Sprouts News Exclusive
Contact: +91 9322755098
Sprouts News Exclusive
Contact: +91 9322755098
Despite heightened tensions following ‘Operation Sindoor’ and the Pahalgam terror attack, India-Pakistan trade continues, primarily through third countries. India’s exports to Pakistan hit a three-year high at $211.5 million in FY2025. The Sprouts News Investigation Team (SIT) reveals a thriving shadow trade despite formal diplomatic and trade suspensions since 2019.
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India’s Exports to Pakistan Hit 3-Year High Amid Diplomatic Strain
Despite heightened military and diplomatic tensions following the Pahalgam terrorist attack and the subsequent ‘Operation Sindoor’ by Indian armed forces, trade between India and Pakistan has not completely halted. In fact, according to official data and reports reviewed by the Sprouts News Investigation Team (SIT), India’s exports to Pakistan during the current financial year have reached their highest level in three years.
Following the April 22 terror strike in Pahalgam, India had taken decisive steps, including shutting down the Attari land-transit post, suspending the Indus Waters Treaty, and initiating a retaliatory military operation. In response, Pakistan attempted air aggression, resulting in a four-day military standoff between the two nuclear-armed neighbors.
However, even amid these developments, trade—primarily through third-party countries—continued between the two nations.
Trade Figures Reveal Surprising Continuity
$211.5 Million in Exports from India to Pakistan in FY2025
According to data published by Pakistan’s State Bank, cited by Pakistan’s leading daily Dawn, India’s total exports to Pakistan between May and July 2025 stood at $211.5 million, surpassing previous years:
•FY2024: $207 million
•FY2023: $190 million
Even during May 2025, shortly after the military escalation, India managed to export goods worth $15 million to Pakistan, compared to $17 million during the same month in 2024.
The Sprouts News Investigation Team (SIT) analyzed these figures in context with geopolitical events and found that most of the trade is being routed through Dubai, Colombo, and Singapore, serving as transshipment hubs to bypass direct trade restrictions.
Imports from Pakistan to India Remain Negligible
Official Imports Drop to Just $1,000 in May 2025
While India’s exports to Pakistan have witnessed a steady climb, imports from Pakistan remain negligible. In May 2025, India imported just $1,000 worth of goods from Pakistan. Total imports during the May–July period stood at only $0.5 million, sharply lower than:
•FY2024: $3.44 million
•FY2023: $0.33 million
This trend highlights the heavily skewed trade balance and indicates that Pakistan’s restrictions on Indian goods are more symbolic than effective.
Formal Trade Suspension vs Reality
Attari Post Closure Did Not Fully Halt Commerce
After the Pahalgam attack, India immediately shut down the Attari land transit point used for the shipment of specific goods. In retaliation, Pakistan declared that “all trade with India is suspended with immediate effect.” However, data suggests otherwise.
As per the Sprouts News Investigation Team (SIT), while formal trade relations remain restricted, informal and third-party trade routes have flourished, effectively circumventing the bans. Researchers quoted by Dawn estimate that India’s unofficial exports to Pakistan may exceed $10 billion annually, with Dubai, Colombo, and Singapore acting as critical trade intermediaries.
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Trade Continues Despite Diplomatic Freeze
Policy Gaps Enable Third-Country Trade Loopholes
Since the formal suspension of trade in 2019, both governments have maintained a hardline stance. Yet, reality on the ground paints a different picture. Official statistics show limited trade, but independent trade analysts and research institutes claim that informal trade routes have become increasingly institutionalized.
The Sprouts News Investigation Team (SIT) also highlights that while military and political narratives remain confrontational, economic compulsions—especially in sectors like pharmaceuticals, raw materials, and textiles—continue to drive covert trade between India and Pakistan.
Shadow Trade Flourishes Amidst Public Rhetoric
Despite public posturing and diplomatic hostility, India-Pakistan trade continues through informal channels, setting a classic example of realpolitik over rhetoric. As long as regional tensions persist and formal trade remains suspended, these third-party trade mechanisms will continue to thrive—raising questions about the effectiveness and consistency of cross-border trade policies.
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