Pakistan downgrades diplomatic ties, suspends trade with India: What it means

Pakistan's top civil and military leadership on Wednesday decided to expel Indian High Commissioner Ajay Bisaria and suspend bilateral trade with India in the wake of New Delhi's move of revoking special status for Jammu and Kashmir.

The decision was taken at a meeting of National Security Committee (NSC) - the second within a week - presided over by Pakistan Prime Minister Imran Khan to review the situation following the Indian government's move on Kashmir. "We will call back our ambassador from Delhi and send back their envoy," Foreign Minister Shah Mehmood Qureshi separately announced in televised comments.

What does it mean?

It appears that Pakistan's decision to temporarily suspend trade ties will not have much impact on both the nations. Trade between both nations had stood at just $2.4 billion in 2017-18, accounting for a mere 0.31 per cent of India’s total trade with the world and just about 3.2 per cent of Pakistan’s global trade.

Meanwhile, Pakistan has also partially closed its airspace amid growing tensions with India over the abrogation of Article 370. However, according to national carrier Air India, its westbound operations will not be impacted much by Pakistan's decision to partially close its airspace.

Indian intelligence reports suggest that terror launch pads across the Line of Control (LoC) have been activated with a ‘huge spike’ in infiltration expected in the coming days.

Pakistan also said that it will review bilateral arrangements. Pakistan also said that it will take the matter to the United Nations, including the Security Council. After the meeting, it was announced that the Pakistani Independence Day (August 14) will be "observed in solidarity with brave Kashmiris and their just struggle for their right of self-determination". It also announced that August 15 will be observed as Black Day.

The resolution reiterated the "strong conviction of Pakistan that the Jammu and Kashmir dispute would be resolved only through dialogue and diplomacy and in accordance with international law."

Pakistan Prime Minister Imran Khan also directed that all diplomatic channels be activated to highlight the alleged human rights violations in the Valley. He also asked the military to continue vigilance, according to the statement.

India on Monday abolished Article 370 of the Constitution that gave special status to Jammu and Kashmir and bifurcated the state into two Union Territories -- Jammu and Kashmir, and Ladakh. Trade relations between India and Pakistan were already strained following the Pulwama terror attack in February as India imposed 200 per cent customs duty on all goods imported from the neighbouring nation.

While India's exports to Pakistan stood at USD 2 billion, imports were about USD 500 million per year. Imports from Pakistan declined by 92 per cent to USD 2.84 million in March this year compared to USD 34.61 million in March 2018, according to the commerce ministry data. India imported goods such as cotton, fresh fruits, cement, petroleum products and mineral ore from Pakistan. During April-June this fiscal, imports stood at to USD 7.13 million.

India's exports to Pakistan too have dipped by about 32 per cent to USD 171.34 million in March. However, exports had increased by 7.4 per cent to USD 2 billion during 2018-19. During April-June this fiscal, India’s exports stood at USD 314.7 million. The main products being exported by India include organic chemicals; cotton; nuclear reactors, boilers; plastic products; tanning or dyeing extracts; cereals; sugar; coffee, tea; articles of iron and steel; copper and footwear.

India had also revoked the MFN (most favoured nation) status to Pakistan in the aftermath of the terror attack. The country has repealed a security exception clause of the World Trade Organisation (WTO) to withdraw this status. Both the countries are member of this body. India can also restrict trade of certain goods and impose port-related restrictions on Pakistani goods. India had granted the MFN status to Pakistan way back in 1996, but the neighbouring country had not reciprocated. Under the MFN pact, a WTO member country is obliged to treat the other trading nation in a non-discriminatory manner, especially with regard to customs duty and other levies.

(Inputs for Agencies)

(For all the latest News, Mumbai, Entertainment, Cricket, Business and Featured News updates, visit Free Press Journal. Also, follow us on Twitter and Instagram and do like our Facebook page for continuous updates on the go)

Free Press Journal