Political and diplomatic relations between India and Pakistan have been stressful for a long time but despite this business connectivity has not ended completely. You will be surprised to know that Indo-Pak is doing ‘backdoor trade’ through the third country. That is, business is going on beyond borders in a way. Diplomatic relations between the two countries are closed but trade is on and the third countries remain the ‘bridge’ of Indo-Pak trade. Let us tell you that in May 2025, when the military conflict between India and Pakistan was going on, at the same time, there was a lot of trade between the two countries through third countries i.e. backdoor trade. Let us tell you that even though direct trade between India and Pakistan is suspended, countries like the United Arab Emirates (UAE), Singapore and Afghanistan are working as “transit points”. For example, Pakistan imports essential medicines, spices and tea from India from UAE, while India is getting cotton, sports materials and some handicraft items through Dubai.
Let us tell you that Pakistani newspaper ‘Don’, citing the data of State Bank of Pakistan (SBP), said that official data has revealed that imports from India reached a three-year high during the last financial year 2024-25 July-May. It stated that imports from India in the first 11 months of the last financial year stood at $ 21.15 million, which was $ 20.7 million in FY 2023-24 and more than $ 19 million in FY 2022-23. In May alone, when a four -day struggle broke out in the first week, imports stood at $ 1.5 million, which was slightly less than $ 1.7 million last year. However, Pakistan’s exports to India were negligible.
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Let us tell you that formal trade relations between Pakistan and India are affected by 2019. After the Pahalgam terror attack on 22 April, India took several more steps. These included immediate closure of the attic land-trading post, which was used for the movement of some types of goods. In retaliation, Pakistan also announced that ‘all trade with India, including trade with any third country through Pakistan, is immediately suspended.
Let us tell you that the system of imports from third countries remained because many medicines, life saving medicines and agricultural-based products are necessary for the general public of Pakistan. At the same time, cotton and some special textiles of Pakistan are a matter of attraction for the traders of India. In addition, it is beneficial for small and medium level traders of both countries to keep the business running through some or the other, even if the cost increases.
However, there is also a fact that the system of trade through third countries is temporary, expensive and incredible. This not only increases the cost but also reduces transparency. Additionally, this type of business gives rise to problems like tax evasion, wrong invoicing and money laundering.
However, if seen, the suspension of formal trade between India and Pakistan remains a challenge for the business classes of both countries. However, the trade through the third countries has shown that when politics arises, the market finds a way. Nevertheless, the reconstruction of transparent, safe and formal business structures will be beneficial in the long -term interests of any nation.