India-Pakistan Trade Suspension: What Goods Will Become Expensive in India if Bilateral Trade Ends

KKN Gurugram Desk | With India adopting a stricter stance following the Pahalgam terror attack, bilateral relations with Pakistan have hit a new low. The Indian government is reportedly reviewing all avenues of diplomatic and economic engagement, including trade. If the already limited India-Pakistan trade is completely halted, the impact will be felt on both sides of the border.

While Pakistan’s fragile economy would likely take a harder hit, Indian consumers may also feel the pinch — especially in the prices of certain goods that are primarily imported from Pakistan.

In this article, we examine the key Pakistani goods imported into India, how their supply could be disrupted, and what economic consequences might unfold for both nations.

India’s Tough Stance After Pahalgam Terror Attack

The recent terror strike in Pahalgam has triggered nationwide outrage. India has already begun closing avenues of exchange, including the Attari-Wagah trade and transit routes — the two primary land links for bilateral commerce.

Government sources suggest this could be the beginning of a complete trade freeze with Pakistan. The decision is aimed at applying economic pressure on Islamabad for allegedly supporting and harboring terrorism.

Will India Suffer Too? Yes — in Specific Sectors

While Pakistan will bear the brunt of a trade shutdown, experts say India will also experience price volatility in some imported commodities.

Although bilateral trade volume is modest — estimated at around $500 million annually, according to trade records — certain goods imported from Pakistan have a niche but critical market in India.

1. Rock Salt (Sendha Namak): A Cultural and Religious Staple

The most immediate impact of a trade ban would be felt in the supply of Sendha Namak (rock salt).
This type of salt is almost exclusively imported from Pakistan, particularly from the Salt Range in Punjab province. In India, it holds special significance during religious fasts and festivals.

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If imports are stopped, the price of rock salt is expected to spike sharply, especially during Navratri, Shivratri, and other festivals.

2. Dry Fruits: Almonds, Pistachios, and More

India imports a significant quantity of dry fruits like almonds, walnuts, pistachios, and apricots from Pakistan, particularly through Punjab and Jammu trade channels.

Though India also sources dry fruits from Afghanistan, Iran, and the US, Pakistani produce has a competitive edge in terms of pricing and logistics for the North Indian market.

Disrupting this flow could inflate dry fruit prices, especially during the festive season and wedding months.

3. Optical Lenses and Eyewear Components

Surprisingly, optical lenses and raw materials used in eyewear manufacturing are part of the import portfolio from Pakistan. These are often low-cost alternatives for Indian retailers and manufacturers.

If trade is suspended, this sector might face short-term disruptions, especially among low-margin optical retailers who depend on economical imports.

4. Construction Materials: Cement, Lime, Stone

Pakistan exports cement, lime, and various stone materials to India, particularly in border-adjacent states. These are often used in public infrastructure projects and rural housing.

In the event of a full trade ban, construction costs may rise modestly in certain regions. However, India does have domestic alternatives and third-country suppliers to fill this gap over time.

5. Leather Goods and Textile Accessories

India also imports leather items, cotton yarns, and textile accessories from Pakistan, particularly those with traditional embroideries and handmade work.

These items cater to niche fashion markets and ethnic wear designers in India. Their absence could impact small businesses that specialize in Indo-Pak cultural merchandise.

6. Organic Chemicals and Metal Compounds

Another category of imports includes organic chemicals, dyes, and various metal compounds, which are used in small-scale manufacturing units across North India.

While these can be sourced from other countries, the transition could cause temporary price fluctuations and supply gaps.

India’s Exports to Pakistan: A Far Larger List

While imports from Pakistan are limited, India exports a diverse and high-volume range of products to Pakistan. These include:

• Pharmaceuticals and medical equipment

• Plastic and plastic-based products

• Agricultural goods like fresh fruits, vegetables, tea, coffee, and spices

• Dairy products and animal feed

• Cotton and synthetic fibers

• Processed foods and consumer packaged goods

The cessation of this trade could impact Indian exporters, particularly in the small and medium enterprise (SME) sector, although the overall national impact would be minimal.

Who Will Suffer More — India or Pakistan?

According to trade analysts and economists, Pakistan will suffer a significantly larger blow from a full trade freeze. With its economy already battling record inflation, dwindling foreign reserves, and IMF pressure, Pakistan’s ability to withstand further isolation is limited.

In contrast, India — with its diverse import sources and robust domestic market — will face only localized or short-term disruptions in certain goods.

India’s Strategic Options: Trade as a Pressure Tool

India has, in the past, used economic and diplomatic isolation as a tool to pressure Pakistan in the wake of terror attacks — notably after Uri (2016) and Pulwama (2019).

This time, a long-term trade freeze appears to be on the table as part of a broader geo-economic strategy. Government officials believe cutting trade ties could deepen Pakistan’s domestic political and economic instability, thereby weakening support for militant activities.

The Role of Informal Trade and Smuggling

It’s important to note that even with formal trade routes closed, informal trade and smuggling networks — particularly across Punjab and Rajasthan borders — have historically played a role in Indo-Pak commerce.

Items like dry fruits, spices, and textiles often find their way across the border, albeit at higher prices. A formal ban might only push such goods into informal channels, reducing government control and tax revenue.

What Should Indian Consumers Expect?

Indian consumers may see temporary price rises in:

• Sendha Namak (rock salt)

• Dry fruits during festival seasons

• Budget eyewear lenses

• Cultural leather goods or handmade ethnic fashion

However, these changes are unlikely to affect the broader market, and substitution through other countries or domestic production will likely stabilize prices over time.

India’s trade ties with Pakistan have always been limited and politically sensitive. The current situation is no different. While there may be short-term cost implications for Indian businesses and consumers, national security concerns are being prioritized.

For Pakistan, the impact is far more severe. A full-scale trade cut-off could deepen its economic crisis, isolate it further internationally, and add to internal pressures.

As tensions rise, trade becomes both a casualty and a weapon in the broader political conflict between the two nations.