India and Pakistan trade within two sets of trade relationships namely most-favored nation (MFN) and South Asian Free Trade Agreement (SAFTA). Most trade practitioners feel that regional trade may not be fully realised until India and Pakistan do not address the difficult non-tariff barriers (NTBs). Many of these NTBs are not South Asia specific; however, they impose substantial transaction costs making exports of neighbouring countries uncompetitive.

The current level of trade between India and Pakistan continues to remain abysmally low. While supply-side factors play their role, the flow of goods and services has also been affected by political ties between the two countries. There are instances of sharp increase in trade volume and equally sharp decrease. While the balance of trade remains in favour of India, the volatilities are on the side of Indian exports to Pakistan. On the contrary, Pakistan’s exports to India have remained low and almost followed a constant pattern. It should be qualified over here that these trade statistics do not represent the true value of trade that currently exists between the two countries. Civil society organisations and think tanks who have led the track-II efforts on both sides have pointed out the quantum of informal trade that exists between the two.

This paper will identify and analyse the NTBs faced by Pakistani exports at Indian ports, with particular attention to exports belonging to the textile, leather, fruit and vegetable sectors. Based on recent data, the study will provide a new picture to the issue of NTBs that still exist despite the signing of recent trade agreements between both countries. This will not only add to the existing knowledge regarding NTBs in India, but will also identify sector specific NTBs. The findings of the study will be based on a mix of quantitative and qualitative methods.

The paper will also discuss policy recommendations which will clearly differentiate between NTBs that exist due to inefficiencies and others that exist as a deliberate policy measure to protect particular domestic Indian businesses.