In numbers: How financial crisis has forced Pakistan to knock on India’s door

Three years after walking out of trade relations with India over abrogation of Article 370 from Jammu & Kashmir, a dire economic crisis has forced Pakistan to return crawling to New Delhi for resumption of commercial ties. 

Three years after walking out of trade relations with India over abrogation of Article 370 from Jammu & Kashmir, a dire economic crisis has forced Pakistan to return crawling to New Delhi for resumption of commercial ties. 

Reports say the new Shehbaz Sharif government in Pakistan has given the go-ahead for appointment of a trade minister in its New Delhi high commission, who will work to restore trade between the neighbouring countries. The post had been lying vacant since August 2019, when Pakistan suspended trade with India following the latter’s decision to withdraw special powers to J&K and split the state in two. 

A month later, however, Islamabad partially relaxed the ban, permitting trade in certain pharma products that constitute the bulk of Pakistan’s imports from India. 

Cut to 2022 and Pakistan is facing one of its worst financial crises that even saw the Imran Khan government being ousted by a rainbow coalition of Opposition parties. 

Pakistan is facing a balance of payments crisis; its exchange rate is under pressure; reserves are at precarious levels; and a widening current account deficit threatens a total collapse. Data from the Pakistan Bureau of Statistics shows March 2022 retail inflation at 12.7 per cent, with perishable food items as high as 30 per cent.