Economic growth of india and pakistan relationship

economic growth of india and pakistan relationship

Relations between India and Pakistan have been complex and largely hostile due to a number .. During the s–90s, India began development of space and nuclear rockets, which marked Pakistan's efforts to engage in the space race with India. . Pakistan and India have also decided to co-operate on economic fronts. Bilateral trade between India and Pakistan is considered by certain quarters on both transform the overwrought bilateral relations to sustained bilateral relations. development when both India and Pakistan signed South Asian. Free Trade. Three powers – China, India, and Pakistan – hold the keys to the future of south the Sino-Pak partnership and strengthen its own strategic ties with the United strategy, and by offering economic and development assistance to Pakistan.

Bilateral trade was truncated, however, first by the war of and then the war. These two wars and, later, the civil unrest in Kashmir in the s had a very detrimental effect on bilateral trade because they introduced a military element into what had been, until then, a purely commercial paradigm. They persuaded the precursor to the World Trade Organisation, the Generalised Agreement on Tariffs and Trade, to insert an India-Pakistan-specific special clause into the Text of the Generalised Agreement on Tariffs and Trade that relates to international trade to reflect this circumstance.

Taking into account the exceptional circumstances arising out of the establishment of India and Pakistan as independent states and recognising the fact that they have long constituted an economic unit, the contracting parties agree that the provisions of this Agreement shall not prevent the two countries from entering into special arrangements with respect to the trade between them, pending the establishment of their mutual trade relations on a definitive basis.

The situation turned completely in the early s when, following the collapse of its strategic partner, the Soviet Union, and realising that it would need to enter fully into the international community if it were not to become a failed state, India embraced international trade with both arms and, subsequently, saw its economy grow rapidly.

This step was taken as part of the attempt by the two countries to lay the Kashmir issue to rest by the thirtieth anniversary of their independence. New Delhi terminated all air- and land-borne trade with Pakistan following the attacks on its Parliament in Decemberwhich it alleged were carried out by Pakistani-based militants.

That imposition remained in force until A restrictive maritime trade regimen was also implemented.

India–Pakistan relations - Wikipedia

As a consequence, informal trade between the two countries began, with trade occurring via third parties like Dubai, albeit at increased cost. Inthe two sides came together for a dialogue on trade.

economic growth of india and pakistan relationship

That dialogue would eventually extend over four more rounds of talks but culminated in three outcomes in The ongoing dialogue was halted in the wake of the terrorist attacks on Mumbai and only resumed in It is interesting to note, however, that no drastic measures were enacted to stop or decrease bilateral trade over that period. In AprilPakistan initiated measures to grant MFN status to India and, in November of the same year, produced an itinerary to phase in that status.

A major part of that process was for Islamabad to move from a positive list approach to a negative one, which would list only those items that could not be imported from India — around 1, products and items; for its part, New Delhi curbed its list of restricted imports from Pakistan to just over in September From the Indian perspective, this is a very small part of its overall trade.

It could be perceived, nevertheless, as a measure of the importance of trade in the bilateral relationship that the two sides persist in ensuring that it continues. In the most recent instance of alleged cross-border violence, eighteen Indian soldiers were said to have been killed by militants who crossed the border from Pakistan in late September While these actions caused much debate and calls for action against the other on both sides of their common border, it is noteworthy that even after the Indian Government said it would review trade relations, the MFN status it has given Pakistan and the terms of the Indus Water Treaty, nothing of the kind has eventuated.

economic growth of india and pakistan relationship

The volume of trade may be expected to fall in the aftermath of the September incident but, as the previous diagram demonstrates, the general trend of trade between the two countries remains upwards.

This is borne out by the following diagram, which also indicates that while political events such as the one described can cause a downturn in trade between India and Pakistan, those ties resume and even grow once the initial anger and furore has died down. Bush confronted Pakistani Prime Minister Yousuf Raza Gilani with evidence and warned him that in the case of another such attack he would have to take "serious action".

Insurgency in Jammu and Kashmir According to some reports published by the Council of Foreign Relationsthe Pakistan military and the ISI have provided covert support to terrorist groups active in Kashmirincluding the al-Qaeda affiliate Jaish-e-Mohammed.

Many Kashmiri militant groups also maintain their headquarters in Pakistan-administered Kashmirwhich is cited as further proof by the Indian government. Author Gordon Thomas stated that Pakistan "still sponsored terrorist groups in the state of Kashmir, funding, training and arming them in their war on attrition against India.

A car bomb exploded near the Jammu and Kashmir State Assembly on 1 Octoberkilling 27 people on an attack that was blamed on Kashmiri separatists. It was one of the most prominent attacks against India apart from on the Indian Parliament in December The dead bodies of the terrorists and the data recovered from them revealed that Pakistan was solely responsible for the activity.

On 13 Julyarmed men believed to be a part of the Lashkar-e-Toiba threw hand grenades at the Qasim Nagar market in Srinagar and then fired on civilians standing nearby killing twenty-seven and injuring many more.

economic growth of india and pakistan relationship

Abdul Ghani Lone, a prominent All Party Hurriyat Conference leader, was assassinated by an unidentified gunmen during a memorial rally in Srinagar. The assassination resulted in wide-scale demonstrations against the Indian occupied-forces for failing to provide enough security cover for Mr. A car bomb exploded near an armoured Indian Army vehicle in the famous Church Lane area in Srinagar killing four Indian Army personnel, one civilian and the suicide bomber.

Terrorist group Hizbul Mujahideenclaimed responsibility for the attack. A terrorist attack on 29 July at Srinigar 's city centre, Budshah Chowk, killed two and left more than 17 people injured. Most of those injured were media journalists. No Terrorist group claimed responsibility for the attack. A terrorist attack by four heavily armed terrorists on 18 Septembernear the town of Uri in the Indian state of Jammu and Kashmir, killed 18 and left more than 20 people injured. It was reported as "the deadliest attack on security forces in Kashmir in two decades".

India blamed Pakistan for carrying out the attacks, an allegation which Pakistan strongly denied and one that brought both nations to the brink of a nuclear confrontation in — However, international peace efforts ensured the cooling of tensions between the two nuclear-capable nations. The plane was hijacked on 24 December approximately one hour after take off and was taken to Amritsar airport and then to Lahore in Pakistan.

After refueling the plane took off for Dubai and then finally landed in KandaharAfghanistan. Under intense media pressure, New Delhi complied with the hijackers' demand and freed Maulana Masood Azhar from its captivity in return for the freedom of the Indian passengers on the flight.

The decision, however, cost New Delhi dearly. Maulana, who is believed to be hiding in Karachilater became the leader of Jaish-e-Mohammedan organisation which has carried out several terrorist acts against Indian security forces in Kashmir. The Fort houses an Indian military unit and a high-security interrogation cell used both by the Central Bureau of Investigation and the Indian Army.

The terrorists successfully breached the security cover around the Red Fort and opened fire at the Indian military personnel on duty killing two of them on spot.

India–Pakistan relations

The attack was significant because it was carried out just two days after the declaration of the cease-fire between India and Pakistan. The attack was carried out on 25 Septemberjust few days after state elections were held in Jammu and Kashmir. Two identical letters found on both the terrorists claimed that the attack was done in retaliation for the deaths of thousands of Muslims during the Gujarat riots. Though no terrorist group claimed responsibility for the attacks, Mumbai Police and RAW suspected Lashkar-e-Toiba 's hand in the twin blasts.

Before the terrorists could reach the main disputed sitethey were shot down by Indian security forces. One Hindu worshipper and two policemen were injured during the incident.

Why friendly ties with India will be a boon for Pakistan

This was the first major military standoff between India and Pakistan since the Kargil War in The military buildup was initiated by India responding to a Indian Parliament attack and the Jammu and Kashmir legislative assembly attack. At least 68 people were killed, mostly Pakistani civilians but also some Indian security personnel and civilians.

The sole surviving gunman Ajmal Kasab who was arrested during the attacks was found to be a Pakistani national. This fact was acknowledged by Pakistani authorities. Islamabad resisted the claims and demanded evidence. India provided evidence in the form of interrogations, weapons, candy wrappers, Pakistani Brand Milk Packets, and telephone sets.

Nor does this direct economic cost reckon with the opportunity cost of Indian defence and security expenditure aimed at securing the border and ensuring preparedness in the event of a flare up in hostilities with Pakistan. What is more, despite receiving injections of US financial support, the Pakistan economy seems to lurch from crisis to crisis.

economic growth of india and pakistan relationship

Given that the Pakistan economy is perpetually on life support and benefits disproportionately from its limited ties with India, economic logic suggests that Pakistan has much more to gain from normalizing economic relations than India. With increased tax revenues available to spend on infrastructure and economic development and with the possibility of increased cross border gains from trade, Pakistan would be much better poised than it is at present to jump start its faltering economy.

Important Development in India US Relations --- US pushed the ‘India office’ out of the Pentagon

A putative partnership with India makes economic sense. The end result will be that Pakistan will be in hock to China and even worse off than today. No doubt they reckon that given that Pakistan is evidently crucial to the US effort to fight Islamic terrorism in South Asia, they can always rely on a lifeline of US or IMF support whenever the economy falters due to mismanagement and corruption. While India continues its rise, Pakistan continues to stumble from crisis to crisis, whether it is a weakening economy kept alive by injections of foreign money or a dysfunctional political system in which a popularly elected sitting Prime Minister can be ousted by unelected judges at the behest of the military.