{"id":4264,"date":"2019-09-05T22:15:40","date_gmt":"2019-09-05T16:45:40","guid":{"rendered":"https:\/\/triumphias.com\/blog\/?p=4264"},"modified":"2019-09-05T22:15:40","modified_gmt":"2019-09-05T16:45:40","slug":"the-india-pakistan-face-off-is-having-more-repercussions-than-intended-with-border-economies-the-worst-hit","status":"publish","type":"post","link":"https:\/\/triumphias.com\/blog\/the-india-pakistan-face-off-is-having-more-repercussions-than-intended-with-border-economies-the-worst-hit\/","title":{"rendered":"The India-Pakistan face-off is having more repercussions than intended, with border economies the worst hit"},"content":{"rendered":"<p><strong>Relevance: Mains: G.S paper II: International relations<\/strong><\/p>\n<p><strong>Context<\/strong><\/p>\n<ul>\n<li>The India-Pakistan face-off in the recent period is having more repercussions than intended, with border economies the worst hit.<\/li>\n<\/ul>\n<p><strong>What is the recent trade unrest?<\/strong><\/p>\n<ul>\n<li>In February 2019, in the wake of the Pulwama attack, India decided to withdraw the Most Favoured Nation (MFN) status to Pakistan.<\/li>\n<li>Subsequently, it imposed 200% customs duty on all Pakistani goods coming into India.<\/li>\n<li>After the Balakot airstrikes, again, India and Pakistan closed their airspace, with Pakistan keeping the ban in place for nearly 5 months.<\/li>\n<li>In April 2019, India suspended trade across the Line of Control in J&amp;K, citing misuse of the trade route by Pakistan-based elements.<\/li>\n<li>More recently, post the Jammu and Kashmir Reorganisation Bill, Pakistan cut off diplomatic and economic ties with India.<\/li>\n<li>It expelled the Indian envoy, partially shutting airspace and suspending bilateral trade.<\/li>\n<\/ul>\n<p><strong>What was the impact?<\/strong><\/p>\n<ul>\n<li>The impact of the escalating tensions has trickled down to trade relations between both the countries, much severe this time.<\/li>\n<li>In 2018-19, bilateral trade between India and Pakistan was valued at $2.5 billion.<\/li>\n<li>In this period, India\u2019s exports to Pakistan accounted for $2.06 billion and imports from Pakistan were at $495 million.<\/li>\n<li>India\u2019s decision in regards with the withdrawal of MFN status and imposition of 200% duty has hurt Pakistan\u2019s exports to India.<\/li>\n<li>The exports fell from an average of $45 million per month in 2018 to $2.5 million per month in the last 4 months.<\/li>\n<li>With Pakistan deciding to completely suspend bilateral trade, cotton exports from India to Pakistan might get affected the most, eventually hurting Pakistan\u2019s textiles.<\/li>\n<li>In all, the trade tensions have led to a loss on both sides.<\/li>\n<\/ul>\n<p><strong>What is the larger implication?<\/strong><\/p>\n<ul>\n<li>Unlike national economies, border economies owe their existence to cross-border economic opportunities.<\/li>\n<li>These economies generally experience sudden ups and downs on account of political changes, trade bans, price and exchange rate, and tax fluctuations.<\/li>\n<li>E.g. Amritsar (where major economic activity is largely dependent on border trade with Pakistan)<\/li>\n<li>Amritsar is land-locked, and is not a metropolis and traditionally has no significant industry.<\/li>\n<li>Hence, any decision on India-Pakistan trade has a direct impact on the local economy and the people of Amritsar.<\/li>\n<li>Since February 2019, estimated, 5,000 families have been directly affected in Amritsar because of breadwinner dependence on bilateral trade.<\/li>\n<\/ul>\n<p><strong>Way forward<\/strong><\/p>\n<ul>\n<li>In all, the overall economics of the two countries may very well manage to stay afloat despite the suspension of economic ties.<\/li>\n<li>However, it is the local economies that will suffer the most and are already perishing.<\/li>\n<li>In this connection, there has been a loss in business, rise in prices, lack of alternative sources of livelihood, and an expected increase in bank defaults.<\/li>\n<li>Alternative sources of livelihood that can be generated to keep border economies afloat should be found with high priority.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Relevance: Mains: G.S paper II: International relations Context The India-Pakistan face-off in the recent period is having more repercussions than<\/p>\n","protected":false},"author":1,"featured_media":3530,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[123,18],"tags":[392],"class_list":["post-4264","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-current-affairs","category-general-studies-ii","tag-union-public-service-commission-upsc"],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/posts\/4264","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/comments?post=4264"}],"version-history":[{"count":1,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/posts\/4264\/revisions"}],"predecessor-version":[{"id":4265,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/posts\/4264\/revisions\/4265"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/media\/3530"}],"wp:attachment":[{"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/media?parent=4264"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/categories?post=4264"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/tags?post=4264"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}