Pakistan and India severed most commercial ties in the spring of 2025 following a deadly attack in Kashmir and subsequent military conflict. After a four-day exchange of missile and drone strikes that ended with a ceasefire on May 10, bilateral trade deteriorated sharply. However, data from Pakistan’s central bank indicates a gradual recovery eighteen months later.
According to the State Bank of Pakistan, Pakistani imports from India reached $61.7m from July to September this year, representing a 69 percent increase compared to the same period a year earlier. Monthly payment data shows that imports fell significantly immediately after the conflict, dropping from $20m in April 2025 to lows of $8.2m in July before stabilizing around $19m by September. Over the full 2025-2026 fiscal year ending this June, Pakistan imported $203.8m worth of goods from India, slightly below the previous year’s total.
Pharmaceutical products and organic chemicals dominate the trade relationship, accounting for over 96 percent of imports. Vaccines, blood products and related items represented the largest category at $93.6m, with vaccine imports for human use increasing significantly to $32.3m from $11.1m. Industry analysts attribute this reliance to India’s competitive pharmaceutical sector, particularly in active pharmaceutical ingredients, which Pakistan sources due to pricing, product availability and geographical proximity.
While Pakistan imposed comprehensive trade restrictions on Indian goods in 2019 and again following the 2025 conflict, pharmaceutical products have remained exempt due to regulatory allowances. Some imports also continue through third countries such as Dubai and Malaysia. Experts note that alternative sourcing could increase costs by 40 to 50 percent for certain businesses, creating economic incentives to maintain the trade relationship despite political tensions.
Recent diplomatic gestures suggest potential easing of relations, including the repatriation of Pakistani fishermen in late August and friendly interactions between Indian and Pakistani sports teams. India accounts for only 0.3 percent of Pakistan’s total import bill, with China remaining the largest trading partner at $19.5bn. Analysts suggest that gradual resumption of trade in areas of clear economic and humanitarian benefit could be mutually advantageous if political conditions permit.
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