Pakistan defers India trade restarting decision over Kashmir | Business and Economy News

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‘Consensus’ move came after top economic decision-making body gave green light for imports of cotton and sugar from India.

The Cabinet of Pakistan has put on hold a decision made by the country’s top economic decision-making body to allow imports of cotton and sugar from India until its neighbour reviews a 2019 move to revoke the special status of Indian-administered Kashmir.

In an effort to cool local demand and prices, Pakistan’s Economic Coordination Committee (ECC) on Wednesday gave the go-ahead for the imports, which was to have ended nearly two years of trade suspension between the nuclear-armed rivals.

On August 5, 2019, the Indian government stripped the special status its part of Kashmir had long held under the Indian Constitution, a move Pakistan said was in contravention of United Nations Security Council resolutions on the decades-long dispute.

On Thursday, a Pakistani Cabinet meeting had to endorse the ECC’s decision to start trade – but instead, it decided to cancel it.

“It was a consensus opinion, including the prime minister, that as long as India doesn’t review … the unilateral steps it took, it wouldn’t be possible to normalise relations with India,” Pakistan’s Foreign Minister Shah Mahmood Qureshi said of Thursday’s Cabinet meeting which had to endorse the ECC’s decision for trade to start.

The decision to import cotton and sugar has now been deferred, for the time being, not overturned completely.

“There was a debate [in the Cabinet], and I tell you, a majority isn’t in favour that we start trade with India without talking about the Kashmir issue,” a source told the Reuters news agency on condition of anonymity.

Pakistani Prime Minister Imran Khan’s government has been battling rising inflation in recent months, and the opening of trade with India was seen likely to help ease the pressure on some basic commodities.

Recent cooling of tensions

The ECC decision came after the Indian and Pakistani prime ministers exchanged letters last week, with Khan saying his country “desire[s] peaceful, cooperative relations with all neighbours, including India”.

For his part, Indian Prime Minister Narendra Modi had written that “India desires cordial relations with the people of Pakistan.”

The two nations have fought three full-scale wars since independence in 1947, with tensions centred on the Himalayan region of Kashmir.

The disputed region is split between Pakistan and India but claimed by both in its entirety.

Relations between the neighbours have been virtually frozen since February 2019, when India blamed a Pakistan-based armed group for the bombing of an Indian security convoy in Indian-administered Kashmir.

The attack caused a military standoff that saw both sides bomb each other’s territory, resulting in at least one Indian fighter jet shot down.

However, in February, Pakistan and India’s militaries agreed to strictly observe a ceasefire at the de facto border between the two countries in Kashmir, helping to reduce almost daily firing incidents by both sides.



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