Pakistan-India trade continues despite conflict, with imports hitting a 3-year high

Trade between Pakistan and India continued in May 2025, with imports from India reaching $211.5 million during the first 11 months of FY25, a three-year high. 

Despite a brief military conflict and ongoing border closures, imports in May alone stood at $15 million, slightly down from $17 million during the same month in 2024.

However, exports from Pakistan to India remained minimal. In May 2025, exports amounted to just $1,000, bringing total exports to India for the July-May period to only $0.5 million. 

In contrast, exports were $3.44 million in FY24 and $0.33 million in FY23, illustrating the highly one-sided nature of bilateral trade.

Traders speculated that goods from India may have entered Pakistan through third countries, with payments made before the hostilities in May began.

Despite the limited official trade, Indian research institutions estimate that informal trade between the two countries could reach up to $10 billion annually, primarily routed through Dubai, Colombo, and Singapore. 

Analysts point to high production costs in Pakistan, along with industrial reliance on foreign inputs, as factors contributing to continued unofficial trade.

While formal trade ties have been suspended since 2019, both official data and the ongoing flow of goods suggest economic interdependence between the two nations persists, albeit through informal channels.