Trust Deficit Vs. Trade Deficit: An Analysis of Misconceptions towards Indo-Pakistan Trade Relations

Abstract

This study explores that history of trade relations between Pakistan and India which
have been dominated by three perspectives. First and common (Indian) point of view is
that there should be no trade between Pakistan and India. It is based on assumptions
that Pakistan is an enemy state therefore, India should not benefit their economy. The
second misperception is that trade with India would dump Pakistani market thus
challenging local industries if trade is open (Pakistan’s perspective). The third
perspective, which advocates a careful budding up of trade activities between both the
states. Since independence, discrepant trade agreements and policies of both the
countries have induced constant reversal in the advancement and accomplishment of
further developing trade relations. So, in this type of situation any positive step toward
peace, stability and prosperity is seen with suspicion. The study has been constructed
using the lens of constructivism. India-Pakistan relations are socially constructed. Most
of the data presented is primary in nature, for the data analysis NVIVO software has
been used. It is need of the hour, not to create trade balance in the region keeping the
world scenarios - changing from geopolitics to geo-economics.