Trade between India and Pakistan is likely to suffer a setback in the coming months and fall by 60 per cent to USD 900 million during 2009-10 as domestic traders are shunning the neighbouring country due to the turbulent situation there, a survey said.?
There is great unwillingness on the part of Indian exporters to travel to Pakistan to conclude even the firmed up deals, the survey said adding that currently, the bilateral trade between the countries stood at over USD two billion.?
The survey was conducted by industry body FICCI amongst exporters and importers doing business with Pakistan.?
"The tumultuous situation in Pakistan has created a fear psychosis amongst Indian exporters and importers who say that cross border travel has been a major casualty following the recent developments in the neighbouring country," it said adding that Wait and Watch is the preferred strategy for many as developments in Pakistan have become quite dramatic and unprecedented.?
The key sectors that would see a significant dip in cross border trade include textile and apparel, textile machinery, cotton, agricultural products particularly cereals, steel and chemicals.?
While in the current situation bilateral trade is going down, some of the Indian exporters and importers may take advantage of third country channels like Dubai and Singapore, it said.?
Doing businesses in Pakistan through these channels have a good degree of comfort level and therefore Indian companies may leverage these alternatives to maintain some economic linkages with their counterparts in Islamabad, it said.?
"For textiles, Indian importers have already initiated talks with producers and manufacturers from countries like Egypt and Italy as these are considered as good replacements for import sources from Pakistan," it said.?
The survey further said following the recent terror attack on Sri Lankan cricket team, trade between Pakistan and other nations from the SAARC region would also take a hit.?
"It is also likely that companies from Sri Lanka may start sourcing more quantity from Indian companies," it added.?
The bilateral trade between India and Pakistan had declined from USD 318 million in 1998-99 to USD 161.02 million in 1999-00.?