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Pakistan’s ban on imports may not hurt India

Pakistan’s move to stop import of products from India or of Indian origin is not expected to have much of an impact on the Indian textile industry. While direct exports to Pakistan of cotton have stopped, indirect exports might continue. India exported only four lakh bales of cotton to Pakistan this year as Indian cotton prices were relatively higher. Pakistan purchased mainly from the US this year.

Pakistan imports mainly yarn and cotton from India. However, in recent years, Indian exporters have slowed down their supply to Pakistan. The annual yarn exports to Pakistan are about $100 million and it is mostly the low count yarns.

India’s exports to Pakistan dropped 20.5 per cent in the first quarter of this fiscal. Exports to Pakistan were only 0.6 per cent of India’s outbound shipments during this period. Purchases from Pakistan, too, collapsed 93.3 per cent in the first quarter of this fiscal. This was due to India’s imposition of a 200 per cent duty on purchases from Pakistan. While India’s exports of cotton crashed 71.4 per cent in the April-June period of this fiscal, that of plastics dropped 24.6 per cent. India granted the MFN status to Pakistan in 1996. But Pakistan hasn’t granted the MFN status to India.