Trade: Despite Pak ban, it buys Indian goods worth $10bn/p.a. via Dubai, etc.
Virendra Pandit
New Delhi: Pakistan’s political posturing, somersaults, bans, threats, and warnings apart, its own people are buying ‘Make in India’ goods worth about USD 10 billion annually via indirect routes, the media reported on Saturday.
According to a Global Trade Research Institute (GTRI) report, USD 10 billion worth of Indian goods reach Pakistan annually via transshipment.
They are exported from India to Dubai, Singapore, and Colombo, where they are stored in bonded warehouses, re-labelled to mask their Indian origin, before being re-exported to Pakistan.
In the aftermath of the Pahalgam terror attack, the two countries have, once again, banned bilateral trade.
Whatever Islamabad boasts officially, its people are hugely dependent on Indian products because of which this indirect trade thrives. It underscores the persistent demand for Indian products in Pakistan, albeit at higher costs because of complex supply chains.
The Pakistani buyers of Indian goods mostly belong to its relatively prosperous classes as only they can afford expensive products.
As part of this transshipment process, Indian firms export goods to ports in third countries, where independent firms store them in bonded warehouses – facilities where goods are held without paying duties during transit. There, the goods are re-labelled to mask their Indian origin, often marked as products of the transshipment country, such as “Made in UAE,” “Made in Singapore,” etc.
These re-labelled goods are then shipped to Pakistan, bypassing bilateral trade restrictions.
Citing an example, the GTRI said auto parts worth USD 100,000, being exported from India to Dubai, are re-labelled and resold in Pakistan for USD 130,000. This price increase covers storage, paperwork, and access to a restricted market.
“The practice, while not always illegal, operates in a legal grey zone, exploiting loopholes faster than regulatory responses can adapt,” the GTRI said.
