Pakistan has incurred an estimated $40 billion in cumulative economic losses since bilateral trade with India was suspended in 2019, with Pakistani businesses forced to import goods from geographically distant markets at significantly higher costs, according to the chairman of the Pak-India Business Council, Noor Muhammad Qasuri.

Background: How Trade Collapsed

Commercial ties between the two neighbours ground to a halt following the Pulwama terror attack in 2019 and the escalating political tensions that followed. According to Qasuri, the disruption sharply raised transportation costs, freight charges, and delivery times for Pakistani businesses that had previously relied heavily on cross-border imports from India. The suspension effectively redirected Pakistani import demand to far-flung suppliers in Brazil, Egypt, China, and the United States.

Sector-by-Sector Toll

The pharmaceutical industry has been among the hardest hit. Qasuri noted that Pakistan's pharma sector had long depended on raw materials sourced from India, and estimated that resuming those imports could generate annual savings of $2 billion to $3 billion.

The textile sector has also borne a heavy burden. A sharp drop in domestic cotton production has imposed additional costs of $5 billion, forcing mills to source cotton from alternative international suppliers at premium prices. Notably, farmers in traditional cotton-growing regions are reportedly switching to sugarcane cultivation, a trend that could deepen the supply crisis in the coming years.

Pakistan is also reportedly importing sugar, fertiliser, cement, petroleum products, iron and steel, vegetables, and heavy machinery from distant markets — despite India's substantial and geographically proximate production capacity across these sectors.

The Case for Resumption

Qasuri argued that restoring bilateral trade could lower transportation costs across multiple sectors, improve supply chains, and make petroleum imports cheaper, given that Indian oil refineries are geographically closer to Pakistan. Indian agricultural and industrial products, he said, could directly reduce production costs for a wide range of Pakistani businesses.

He also pointed to the loss of Indian tourists who previously visited religious and historical sites as well as ancestral villages in Pakistan — another revenue stream that dried up after the suspension.

'Pakistan and India share historical, cultural and family ties, which could provide a foundation for improved relations,' Qasuri said. He cited India's financial assistance to Sri Lanka during the island nation's economic crisis as a precedent for meaningful regional economic cooperation even in difficult times.

Wider Regional Context

This comes amid a broader conversation on South Asian economic integration, with analysts noting that Pakistan's economy — under sustained fiscal stress — stands to gain disproportionately from any normalisation of trade ties. Critics, however, argue that political will on both sides remains the primary obstacle, and the economic case alone has rarely been sufficient to drive diplomatic breakthroughs between the two countries. The 2019 suspension marked the most significant rupture in bilateral commerce since the Kargil conflict, and resumption remains contingent on wider geopolitical conditions.