1.

Pakistan’s relation with India: strategic, economic Relations,

political, diplomatic, geographical, hydro-political, cultural, regional
aspects of the relationship:
2. Pakistan and World Powers: USA, Russia, and China.
3. Environment: Global Warming, Kyoto Protocol, Copenhagen Accord
4. Palestine Issue

Pakistan’s relation with India: strategic, economic, political, diplomatic,

geographical, hydro-political, cultural, regional aspects of the
relationship:

Pakistan, due to its historical, religious and geographical position, plays a

complex role in international foreign policy. Flanked by China in the North,
India in the East, Iran and Afghanistan in the west and North-west, and the
Indian Ocean in the south, its strategic location ensures that Pakistan remains
prominent on the world stage. Pakistan’s relations with most of its neighbours
have been subject to ups and downs. Since independence in 1947, Pakistan
and India have fought several wars over territorial claims on Jammu and
Kashmir.

Since partition, relations between Pakistan and India have been characterized
by rivalry and suspicion. Although many issues divide the two countries, the
most sensitive one since independence has been the status of Kashmir, with
three of four wars having been fought over Kashmir (in 1948, 1965 and the
Kargil conflict in 1999 which mainly involved irregular forces from Pakistan’s
side).

After the first war in 1948, the UN arranged a ceasefire in January 1949 and
both countries agreed on an UN-supervised plebiscite to determine the state’s
future under the precondition that both nation’s forces retreat from Kashmir.
The two armies have not retreated, and the plebiscite has never taken place. In
1965, tensions once more flared between Pakistan and India, with frequent
border skirmishes in the Rann of Kutch in southern Pakistan as well as along
the Kashmir border, with efforts by India to incorporate presidential rule onto
the state of Kashmir. Following a Pakistani incursion in Kashmir, India
launched attacks on the cities of Lahore and Sialkot on the 6th of September
1965. An UN-brokered ceasefire under the auspices of the USSR came into
effect two weeks into the offensive, with the Tashkent declaration signed a
year later, where both parties agreed to return their armies to their pre-
August 1964 positions, a decision many regarded as a submission to India.
With the Indian intervention in the civil war in East Pakistan in 1971, saw the
beginning of another Indo-Pakistan war. The war resulted in the formal
separation of East and West Pakistan, with East Pakistan being declared as the
independent nation of Bangladesh. The following year the President Bhutto and
Indian Prime Minister Gandhi met and signed the Simla Agreement, wherein
captured territory and soldiers were returned, and both leaders endorsed the
principle of settlement of bilateral disputes through peacefulmeans. Trade and
diplomatic relations were restored in 1976 after a hiatus of 5 years.

India’s nuclear test in 1974 was perceived as a threatening gesture by

Pakistan, and laid the foundations for the development of Pakistan’s nuclear
weapons program. In April 1984, tensions erupted after troops were deployed
to the Siachen Glacier near the Chinese border, a region that was not
demarcated under the 1949 cease-fire agreement. In December 1985, President
Zia and Prime Minister Gandhi pledged not to attack each other’s nuclear
facilities, with a formal agreement signed to this effect in January 1991. In
early 1986, the Indian and Pakistani Governments began high-level talks to
resolve the Siachen Glacier border dispute and to improve trade.

In May 1998, the Pakistani government declared a state of emergency and

undertook a series of nuclear tests, in response to those carried out by India.
Amidst an international outcry, the US and other states imposed economic
sanctions against both countries. In spite of the tension that ensued, bilateral
relations looked to improve in February 1999 when Indian Prime Minister
Vajpayee travelled to Lahore for a summit with his Pakistani counterpart,
Nawaz Sharif. However, when Pakistani infiltrators occupied positions near the
town of Kargil in Indian-administered Kashmir, any political progress that was
made was negated. The Kargil offensive escalated into what was almost a
fullscale war, fought between irregular forces on the Pakistani side, and the
Indian army. Eventually, with the international community bringing to bear its
influence against Pakistan’s incursion, Nawaz Sharif pulled out all ‘militants’
from Kashmir under a deal brokered by the US. Soon thereafter, relations
deteriorated further when militants attacked the Indian parliament in
December 2001. Although tensions rose significantly following the attack,
both countries showed restraint and by resumed bilateral talks in 2004.
After a destructive earthquake hit the Kashmir region in October 2005,
the two countries cooperated with each other to deal with the
humanitarian crisis. The 2007 Samjhauta Express bombing, the July 2008
bombing of the Indian Embassy in Kabul, and the terrorist attacks in
Mumbai in November 2008 brought dialogue to a halt again, but the
Foreign Ministers of the two countries met in 2010, and hopes of more
wide-ranging, high-level talks are once again emerging.

Indo-Pak Relations – A brief history

India and Pakistan share linguistic, cultural, geographic, and economic

links, yet their relation has been mired in complexity due to a number of
historical and political events.

Indo-Pak relations have been defined by the violent partition of British India in
1947, the Jammu & Kashmir conflict and the numerous military conflicts
fought between the two nations.

The partition of British India was one of the largest human migrations ever
seen and sparked bloody massacres of refugees across the region. It displaced
up to 12.5 million people, with an estimated loss of life of 1 million. India
became a secular nation with a Hindu majority population and a large Muslim
minority, while Pakistan emerged as an Islamic republic with an overwhelming
Muslim majority population and a very small population subscribing to other
faiths.

1947-1948
The first war between India and Pakistan was fought over Jammu & Kashmir.
Armed Pakistani tribesmen aided by the newly created Pakistani Army invade
Jammu & Kashmir in October 1947. The legal ruler of the State of Jammu &
Kashmir, Maharaja Hari Singh, faced with internal revolt as well an external
invasion, requested the assistance of the Indian armed forces and agreed to
accede to India. He handed over control of his defence, communications and
foreign affairs to the Indian government.

Fighting continued through the second half of 1948. The war officially ended on
1 January 1949, when the United Nations (UN) arranged a ceasefire, with an
established ceasefire line, a UN peacekeeping force and the recommendation
that a referendum on the accession of Jammu & Kashmir to India be held.

Pakistan controlled roughly one-third of the State of Jammu & Kashmir,

referring to it as Azad (Free) Jammu & Kashmir and claiming that it was semi-
autonomous. A larger area, including the former kingdoms of Hunza and
Nagar, was controlled directly by the central Pakistani government.

1965
In 1965, India and Pakistan fought their second war, that was preceded by
skirmishes that took place between the two nations between April and
September. There were thousands of casualties on both sides in the war, and
it witnessed the largest engagement of armored vehicles and the largest tank
battle since World War II. It ended after a UN mandated ceasefire was declared
following diplomatic intervention by the Soviet Union and the United States
(US), and the subsequent signing of the Tashkent Declaration.

1971-1972
East Pakistan (now Bangladesh) became the reason for the third war between
India and Pakistan. The conflict between East and West Pakistan begins when
the central Pakistani government that was seated in West Pakistan, led by
Zulfiqar Ali Bhutto, refused to allow Awami League leader Sheikh Mujibur
Rahman, an East Pakistan-based Bengali whose party won the majority of
seats in the 1970 parliamentary elections, to assume the premiership of the
country.
The Pakistani military cracked down on protestors in the Dhaka March in 1971
in which students and teachers were killed in large numbers. India became
involved in the conflict in December, after the Pakistani Air Force launched a
pre-emptive strike on airfields in India's northwest. India retaliated with a
coordinated land, air and sea assault on East Pakistan. It compelled the
Pakistani Army to surrender at Dhaka and more than 90,000 Pakistani
soldiers were taken prisoners of war.

East Pakistan becomes an independent country, Bangladesh, on 6 December

1971.

In July 1972, the Indian Prime Minister Indira Gandhi and her Pakistani
counterpart Prime Minister Zulifiqar Ali Bhutto signed an agreement in the
Indian town of Simla, in which both countries agreed to "put an end to the
conflict and confrontation that have hitherto marred bilateral relations and work
for the promotion of a friendly and harmonious relationship and the
establishment of a durable peace in the subcontinent". Both sides agreed to
settle any disputes "by peaceful means through bilateral negotiations".

The Simla Agreement designated the ceasefire line of 17 December 1971 as

being the new "Line of Control (LoC)" between the two countries, which neither
side was to seek to alter unilaterally, and which "shall be respected by both
sides without prejudice to the recognised position of either side". The Simla
Agreement was ratified by the Parliaments of both India and Pakistan in 1972.

1989
Armed insurgency in the Kashmir Valley began. Muslim political parties, after
accusing the state government of rigging the 1987 state legislative elections,
formed militant wings.

Pakistan declares that it was providing "moral and diplomatic" support to the
militants. However it is widely believed internationally that Pakistan is actually
complicit in stoking the insurgency by providing funding, directions, shelter,
weapons and training to fighters. India is convinced that the armed attacks
against its forces in Jammu & Kashmir are a clear manifestation of "cross-
border terrorism" by Pakistan in pursuit of its policy of 'bleeding India through a
thousand cuts'. Pakistan denies this.

Militant groups taking part in the fight in the Kashmir Valley continued to
emerge through the 1990’s, their ranks bolstered by a large influx of battle-
hardened "Mujahideen" who had earlier taken part in the Afghan war against
the Soviets.
Despite centuries of communal harmony in Jammu & Kashmir between
Muslims, Hindus and Buddhists, the minority Hindu community of Jammu &
Kashmir (Kashmiri Pandits) in the Kashmir Valley was targeted by the
militants and forced to migrate.

Many pan-Islamic terrorist groups like the Lashkar-e-Taibah (LeT), Jaish-e-

Muhammad (JeM) and Hizbul Mujahideen continued to be active in Jammu &
Kashmir. It is widely believed in international circles, including by several
western governments, that these groups are headquartered in Pakistan and
Pakistan Administered Jammu & Kashmir.

1998
India detonated five nuclear devices at Pokhran. Pakistan responded by
detonating six nuclear devices of its own in the Chaghai Hills. The tests
resulted in international sanctions being placed on both countries. Both
countries became the newest Nuclear-armed nations.

1999
Indian Prime Minister Atal Bihari Vajpayee travelled by bus to Lahore (newly
opened Delhi–Lahore Bus service) to meet Prime Minister Nawaz Sharif. The
two signed the Lahore Declaration, the first major agreement between the two
countries since the 1972 Simla Agreement. Both countries reiterated that they
remained committed to the Simla Agreement, and agreed to undertake a
number of Confidence Building Measures (CBMs) aimed at improving bilateral
relations.

In May, the Kargil conflict broke out when Pakistani forces intruded and
occupied strategic positions on the Indian side of the LoC, prompting an Indian
counter offensive in which Pakistani forces were pushed back to their side of
the original LoC.

Kargil was the first armed conflict between the two neighbours since they
officially conducted nuclear weapons tests. Recognition of the potential for
escalation of this conflict and its wider implications caused the then US
President Bill Clinton to summon Pakistani Prime Minister Nawaz Sharif and
demand that he rein in his troops.

2001
On 13 December, an armed attack on the Indian parliament in New Delhi left
14 people dead. LeT and JeM were held responsible for the attacks.
The attacks led to massing of India's and Pakistan's militaries along the LoC.
The standoff ended only in October 2002, after international mediation.

2004
Prime Minister Vajpayee and President Musharraf held direct talks at the 12th
South Asian Association for Regional Cooperation (SAARC) summit in
Islamabad in January, and the two countries' Foreign Secretaries met later in
the year. The year marked the beginning of the Composite Dialogue Process, in
which bilateral meetings were held between officials at various levels of
government (including Foreign Ministers, Foreign Secretaries, military officers,
border security officials, anti-narcotics officials and nuclear experts).

In November, on the eve of a visit to Jammu & Kashmir, the new Indian Prime
Minister, Manmohan Singh, announced that India will be reducing its
deployment of troops there.

2008
On 26 November, in one of the most gruesome terrorist attacks the world has
witnessed, armed gunmen opened fire on civilians at several sites in Mumbai,
India. The attacked places were the Taj Mahal Palace & Tower, the Oberoi
Trident Hotel, the Chhatrapati Shivaji Train Terminus, Leopold Cafe, Cama
Hospital, Nariman House Jewish Community Centre, Metro Cinema, St
Xavier's College and a lane near the Times of India office. More than 160 people
were killed in the attacks. An almost three-day siege of the Taj, where gunmen
remained holed up until all but one of them were killed in an Indian security
forces operation, accounted for the bulk of the casualties.

Ajmal Kasab, the only attacker captured alive, confessed that the attackers
were members of LeT. Tracking calls and communications all linked back to
Pakistan, from where the entire attack was plotted and directed.

In the wake of the attacks, India broke off talks with Pakistan.

2009
The Pakistani government admitted that the Mumbai attacks were planned on
Pakistani soil, but denied that the plotters were sanctioned or aided by
Pakistan's intelligence agencies.

The Indian government continued to take a stern line with Pakistan, however,
with its coalition government saying that it was up to Pakistan to take the first
step towards resumption of substantive talks by cracking down on militant
groups on its soil.
2013
In September, the Prime Ministers of India and Pakistan met in New York on
the sidelines of the UN General Assembly. They agreed to end tension between
the armies of both sides in the disputed region of Jammu & Kashmir.

2014
On 1 May, Pakistan's Army Chief General Raheel Sharif called Kashmir
the "jugular vein" of Pakistan, adding that for lasting peace in the region the
dispute should be resolved in accordance with the wishes and aspirations of
Kashmiris and in line with the United Nations Security Council resolutions.

On 27 May, Indian Prime Minister Narendra Modi held talks with Pakistan's
Prime Minister Nawaz Sharif in New Delhi. Both sides expressed willingness to
begin a new era of bilateral relations.

2015

India’s ruling Bharatiya Janata Party (BJP) party forms the government in
Indian Administered Jammu & Kashmir in coalition with the local People’s
Democratic Party (PDP) in March. Mufti Mohammad Sayeed, head of the PDP,
is sworn in as Chief Minister.

In December, on his way back from Afghanistan, Indian Prime Minister

Narendra Modi makes a surprise visit to Lahore on Prime Minister Nawaz
Sharif's birthday and the wedding of his granddaughter.

2016

JeM terrorists disguised as soldiers, carry out a deadly attack on Pathankot

airbase in India’s northwestern state of Punjab in January. The attack comes a
week after Prime Minister Modi made an impromptu visit to Pakistani
counterpart Nawaz Sharif, in an effort to revive bilateral talks.

In September, JeM terrorists storm an army base in Uri, in Indian

Administered Jammu & Kashmir, and kill 17 Indian soldiers.

On 29 September, India, in its first direct military response to the attack in Uri,
conducts ‘surgical strikes’ on suspected terrorists across the LoC in Pakistan
Administered Jammu & Kashmir.

2017

The Indian Army bombs Pakistani Army check posts in Nowshera along the
LoC in May, which according to Army spokesman, Ashok Narula, was done in
order to prevent infiltration of terrorists into Indian Administered Jammu &
Kashmir.

Terrorists attack Hindu pilgrims in Jammu & Kashmir in July, killing at least
seven and injuring 16, in the worst such attack since 2000.

In December, Indian Army commandos cross the LoC in Jammu & Kashmir
and kill three Pakistani soldiers, two days after four Indian Army men were
shot dead in an ambush in Keri sector of Rajouri.

2018

In January, the Indian Army claims that in total, it has killed 138 Pakistan
Army personnel in 2017 in tactical operations and retaliatory cross-border
firings along the LoC in Jammu & Kashmir and lost 28 soldiers during the
same period.

In May, after several months of deadly violence and cross-border firing along
the LoC, India and Pakistan agree to fully implement the ceasefire pact of 2003
in “letter and spirit” forthwith to stop cross-border firing. Later during the
month, Indian special forces foil an attack by Pakistan's Border Action Team
(BAT).

In June, the UN Office for the High Commissioner for Human Rights (OHCHR)
issues the first ever UN report detailing human rights abuses in Kashmir
titled “Report on the Situation of Human Rights in Kashmir: Developments in the
Indian State of Jammu and Kashmir from June 2016 to April 2018, and General
Human Rights Concerns in Azad Jammu and Kashmir and Gilgit-Baltistan”. This
49-page report of the High Commissioner for Human Rights Zeid Ra'ad Al
Hussein displays a pronounced pro-Pakistan bias in its assessment of the
human rights situation on the two sides of the LoC while UN designated
terrorist organizations and terrorists are classified ‘armed
groups’ and ‘leaders’, as many as 38 times, in the report by the OHCHR.

2019

On 14 February, 40 members of the Indian Central Reserve Police Force (CRPF)

are killed in a suicide bombing in Pulwama in Indian Administered Jammu &
Kashmir. This is the deadliest assault on Indian forces in the troubled region in
decades.

On 15 February, JeM, a Pakistan based terrorist organization, claims the

attack and releases a video identifying the suicide bomber.
Two days later, India hikes tariffs on all imports from Pakistan to 200% with
immediate effect.

On 18 February, days after orchestrating a devastating suicide bombing which

left 40 Indian security forces dead, JeM terrorists kill an Indian Army major
and at least three other soldiers in Jammu & Kashmir. Reportedly, two
terrorists, including a commander of the JeM, thought to have been a
mastermind behind the attack on 14 February, are killed in an exchange of
gunfire with the Indian Army.

Pakistani Prime Minister Imran Khan on 19 February expresses his willingness

to negotiate and cooperate with India regarding the Pulwama attack on 14
February.

Indian Prime Minister Narendra Modi vows a strong response, saying that “…
We will give a befitting reply, our neighbour will not be allowed to destabilise
us”.

Indian and Pakistani armies exchange fire on 25 February at the LoC in

Jammu & Kashmir's Rajouri district.

On 26 February, the Indian government carries out ‘non-military pre-

emptive’ strikes targeting Pakistan-based terrorist group JeM's ‘biggest training
camp’ near Balakot in the Pakistani province of Khyber Pakhtunkhwa. After
initially denying that any such incident had occurred, Pakistan subsequently
acknowledges that Indian fighter aircraft had indeed penetrated deep into
Pakistani territory undetected and had dropped bombs near Balakot. Major
General Asif Ghafoor, spokesperson for the Pakistan armed forces, however,
said that the strikes hit an empty area.

On 27 February, the Pakistan Army warns that it will respond to India’s aerial
bombing. The Indian Air Force shoots down a Pakistani F-16 fighter, while
Pakistan downs two Indian fighter jets and captures one Indian pilot.

On 28 February, Imran Khan says that the captured Indian Air Force pilot
would be released as a “peace gesture”. Reports suggest that the Pakistani
Prime Minister may have been under international pressure, especially from
the US.

In the first week of April, India and Pakistan trade fire in the region of Jammu
& Kashmir, leaving seven people dead.

2021
On 25 February, India and Pakistan reaffirmed their commitment to a cease-
fire along the Line of Control in Jammu & Kashmir.
A joint statement released by the militaries of both countries said that their top
officials had agreed to a strict observance of the truce and to continue
communicating through a hotline to resolve potential misunderstandings.
The news of a renewed commitment to the cease-fire was particularly welcomed
by communities living along the de-facto border, LoC, who have borne the
brunt of the skirmishes from both sides.
On 3 May, Pakistan breached the ceasefire agreement by opening unprovoked
fire in the Ramgarh sector. Several other violations were also reported by both
sides throughout 2021, however, these have not hindered the stability of the
region and the cease-fire has so far remained active.

Continuous attempts were made from both sides accessing the hands to shake
and table talks to resolve various issues with Kashmir dispute on the top
priority. Meeting of PMs from both sides in 2014 at Nawaz Sharif’s oath-taking
ceremony was a gesture to leap towards better relations with India. The
meeting between Prime Ministers’ in Ufa in July 2015 was also initiated to
push the talks ahead; Indian External Affairs Minister’s (EAM) visit to
Islamabad in December 2015 was against a part of that agenda. Both foreign
ministers of Pakistan and India took the initiative to propose a Comprehensive
Bilateral Dialogue in December 2015. However, the initiative was derailed with
India’s blame on Pakistan as perpetrator behind the terror attack on Pathankot
Airbase on 2 January 2016; attack on Army Camp in Uri in August 2016; and
terror attack on the convoy of Indian security forces in Pulwama by Pakistan
based Jaish-e-Mohammad (JeM) on 14 February 2019. Such attacks had never
been supported with valid proves against Pakistan as terror-supporting, terror-
financing, and terror-spreading country.

A timeline of the rocky relationship between the two nuclear-armed South Asian
neighbours.

1947 – Britain, as part of its pullout from the Indian subcontinent, divides it
into secular (but mainly Hindu) India and Muslim Pakistan on August 15 and
14 respectively. The partition causes one of the largest human migrations ever
seen and sparks riots and violence across the region.

1947/48 – The first India-Pakistan war over Kashmir is fought, after armed
tribesmen (lashkars) from Pakistan’s North-West Frontier Province (now called
Khyber-Pakhtunkhwa) invade the disputed territory in October 1947. The
Maharaja, faced with an internal revolt as well an external invasion, requests
the assistance of the Indian armed forces, in return for acceding to India. He
hands over control of his defence, communications and foreign affairs to the
Indian government.

Both sides agree that the instrument of accession signed by Maharaja Hari
Singh be ratified by a referendum, to be held after hostilities have ceased.
Historians on either side of the dispute remain undecided as to whether the
Maharaja signed the document after Indian troops had entered Kashmir (i.e.
under duress) or if he did so under no direct military pressure.

Fighting continues through the second half of 1948, with the regular Pakistani
army called upon to protect Pakistan’s borders.

The war officially ends on January 1, 1949, when the United Nations arranges
a ceasefire, with an established ceasefire line, a UN peacekeeping force and a
recommendation that the referendum on the accession of Kashmir to India be
held as agreed earlier. That referendum has yet to be held.

Pakistan controls roughly one-third of the state, referring to it as Azad (free)

Kashmir. It is semi-autonomous. A larger area, including the former kingdoms
of Hunza and Nagar, is controlled directly by the central Pakistani government.

The Indian (eastern) side of the ceasefire line is referred to as Jammu and
Kashmir state.

Both countries refer to the other side of the ceasefire line as “occupied”
territory.

1954 – The accession of Jammu and Kashmir to India is ratified by the state’s
constituent assembly.

1957 – The Jammu and Kashmir constituent assembly approves a

constitution. India, from the point of the 1954 ratification and 1957
constitution, begins to refer to Jammu and Kashmir as an integral part of the
Indian union.

1963 – Following the 1962 Sino-Indian war, the foreign ministers of India and
Pakistan – Swaran Singh and Zulfiqar Ali Bhutto – hold talks under the
auspices of the British and Americans regarding the Kashmir dispute. The
specific contents of those talks have not yet been declassified, but no
agreement was reached. In the talks, “Pakistan signified willingness to consider
approaches other than a plebiscite and India recognised that the status of
Kashmir was in dispute and territorial adjustments might be necessary,”
according to a declassified US state department memo (dated January 27,
1964).

1964 – Following the failure of the 1963 talks, Pakistan refers the Kashmir
case to the UN Security Council.

1965 – India and Pakistan fight their second war. The conflict begins after a
clash between border patrols in April in the Rann of Kutch (in the Indian state
of Gujarat), but escalates on August 5, when between 26,000 and 33,000
Pakistani soldiers cross the ceasefire line dressed as Kashmiri locals, crossing
into Indian-administered Kashmir.

Infantry, armour and air force units are involved in the conflict while it remains
localised to the Kashmir theatre, but as the war expands, Indian troops cross
the international border at Lahore on September 6. The largest engagement of
the war takes place in the Sialkot sector, where between 400 and 600 tanks
square off in an inconclusive battle.

By September 22, both sides agree to a UN-mandated ceasefire, ending the war
that had by that point reached a stalemate, with both sides holding some of the
other’s territory.

1966 – On January 10, 1966, Indian Prime Minister Lal Bahadur Shastri and
Pakistani President Ayub Khan sign an agreement at Tashkent (now in
Uzbekistan), agreeing to withdraw to pre-August lines and that economic and
diplomatic relations would be restored.

1971 – India and Pakistan go to war a third time, this time over East Pakistan.
The conflict begins when the central Pakistani government in West Pakistan,
led by Zulfiqar Ali Bhutto, refuses to allow Awami League leader Sheikh
Mujibur Rahman, a Bengali whose party won the majority of seats in the 1970
parliamentary elections, to assume the premiership.

A Pakistani military crackdown on Dhaka begins in March, but India becomes

involved in the conflict in
December, after the Pakistani air force launches a pre-emptive attack on
airfields in India’s northwest.

India then launches a coordinated land, air and sea assault on East Pakistan.
The Pakistani army surrenders at Dhaka, and its army of more than 90,000
become prisoners of war. Hostilities lasted 13 days, making this one of the
shortest wars in modern history.

East Pakistan becomes the independent country of Bangladesh on December 6,

1971.

1972 – Pakistani Prime Minister Zulfikar Ali Bhutto and Indian Prime Minister
Indira Gandhi sign an agreement in the Indian town of Simla, in which both
countries agree to “put an end to the conflict and confrontation that have
hitherto marred their relations and work for the promotion of a friendly and
harmonious relationship and the establishment of a durable peace in the
subcontinent”. Both sides agree to settle any disputes “by peaceful means”.

The Simla Agreement designates the ceasefire line of December 17, 1971, as
being the new “Line-of-Control (LoC)” between the two countries, which neither
side is to seek to alter unilaterally, and which “shall be respected by both sides
without prejudice to the recognised position of either side”.

1974 – The Kashmiri state government affirms that the state “is a constituent
unit of the Union of India”. Pakistan rejects the accord with the Indian
government.

On May 18, India detonates a nuclear device at Pokhran, in an operation

codenamed “Smiling Buddha”. India refers to the device as a “peaceful nuclear
explosive”.

1988 – The two countries sign an agreement that neither side will attack the
other’s nuclear installations or facilities. These include “nuclear power and
research reactors, fuel fabrication, uranium enrichment, isotopes separation
and reprocessing facilities as well as any other installations with fresh or
irradiated nuclear fuel and materials in any form and establishments storing
significant quantities of radio-active materials”.

Both sides agree to share information on the latitudes and longitudes of all
nuclear installations. This agreement is later ratified, and the two countries
share information on January 1 each year since then.

1989 – Armed resistance to Indian rule in the Kashmir valley begins. Muslim
political parties, after accusing the state government of rigging the 1987 state
legislative elections, form activist wings.

Pakistan says that it gives its “moral and diplomatic” support to the movement,
reiterating its call for the earlier UN-sponsored referendum.
India says that Pakistan is supporting the resistance by providing weapons and
training to fighters, terming attacks against it in Kashmir “cross-border
terrorism”. Pakistan denies this.

Activist groups taking part in the fight in Kashmir continue to emerge through
the 1990s, in part fuelled by a large influx of “mujahideen” who took part in the
Afghan war against the Soviets in the 1980s.

1991 – The two countries sign agreements on providing advance notification of

military exercises, manoeuvres and troop movements, as well as on preventing
airspace violations and establishing overflight rules.

1992 – A joint declaration prohibiting the use of chemical weapons is signed in

New Delhi.

1996 – Following a series of clashes, military officers from both countries meet
at the LoC in order to ease tensions.

1998 – India detonates five nuclear devices at Pokhran. Pakistan responds by

detonating six nuclear devices of its own in the Chaghai Hills. The tests result
in international sanctions being placed on both countries. In the same year,
both countries carry out tests of long-range missiles.

1999 – Indian Prime Minister Atal Bihari Vajpayee meets with Nawaz Sharif,
his Pakistani counterpart, in Lahore. The two sign the Lahore Declaration, the
first major agreement between the two countries since the 1972 Simla Accord.
Both countries reaffirm their commitment to the Simla Accord, and agree to
undertake a number of ‘Confidence Building Measures’ (CBMs).

Some of the diplomatic gains are eroded, however, after the Kargil conflict
breaks out in May. Pakistani forces and Kashmiri fighters occupy strategic
positions on the Indian side of the LoC, prompting an Indian counter-offensive
in which they are pushed back to the other side of the original LoC.

Kargil is the first armed conflict between the two neighbours since they
officially conducted nuclear weapons tests.

In October 1999, General Pervez Musharraf, the Pakistani chief of army staff,
leads a military coup, deposing Nawaz Sharif, the then prime minister, and
installing himself as the head of the government.

2001 – Tensions along the Line of Control remain high, with 38 people killed in
an attack on the Kashmiri assembly in Srinagar. Following that attack, Farooq
Abdullah, the chief minister of Indian-administered Kashmir, calls on the
Indian government to launch a full-scale military operation against alleged
training camps in Pakistan.

In July, Pakistani President Pervez Musharraf and Indian Prime Minister Atal
Behari Vajpayee meet for a two-day summit in the Indian city of Agra. That
summit collapses after two days, with both sides unable to reach agreement on
the core issue of Kashmir.

On December 13, an armed attack on the Indian parliament in New Delhi

leaves 14 people dead. India blames Lashkar-e-Taiba and Jaish-e-Muhammad
for the attacks.

The attacks lead to a massing of India’s and Pakistan’s militaries along the
LoC. The standoff only ends in October 2002, after international mediation.

2002 – President Musharraf pledges that Pakistan will combat extremism on

its own soil, but affirms that the country has a right to Kashmir.

2003 – After Musharraf calls for a ceasefire along the LoC during a UN General
Assembly meeting in September, the two countries reach an agreement to cool
tensions and cease hostilities across the de facto border.

2004 – Vajpayee and Musharraf hold direct talks at the 12th SAARC summit
in Islamabad in January, and the two countries’ foreign secretaries meet later
in the year. This year marks the beginning of the Composite Dialogue Process,
in which bilateral meetings are held between officials at various levels of
government (including foreign ministers, foreign secretaries, military officers,
border security officials, anti-narcotics officials and nuclear experts). In
November, on the eve of a visit to Indian-administered Kashmir, the new Indian
prime minister, Manmohan Singh, announces that India will be reducing its
deployment of troops there.

2006 – India redeploys 5,000 troops from Jammu and Kashmir, citing an
“improvement” in the situation there, but the two countries are unable to reach
an agreement on withdrawing forces from the Siachen glacier.

In September, President Musharraf and Prime Minister Singh agree to put into
place an India-Pakistan institutional anti-terrorism mechanism.
2007 – On February 18, the train service between India and Pakistan (the
Samjhauta Express) is bombed near Panipat, north of New Delhi. Sixty-eight
people are killed, and dozens injured.

The fifth round of talks regarding the review of nuclear and ballistic missile-
related CBMs is held as part of the Composite Dialogue Process. The second
round of the Joint Anti-Terrorism Mechanism (JATM) is also held.

2008 – India joins a framework agreement between Turkmenistan, Afghanistan

and Pakistan on a $7.6bn gas pipeline project. A series of Kashmir-specific
CBMs are also agreed to (including the approval of a triple-entry permit
facility).

In July, India blames Pakistan’s Inter-Services Intelligence (ISI) directorate for

a bomb attack on the Indian embassy in Kabul, which kills 58 and injures
another 141.

In September, Pakistani President Asif Ali Zardari and Indian Prime Minister
Singh formally announce the opening of several trade routes between the two
countries.

In October, cross-LoC trade commences, though it is limited to 21 items and

can take place on only two days a week.

On November 26, armed gunmen open fire on civilians at several sites in

Mumbai, India. The attacks on the Taj Mahal Palace & Tower, the Oberoi
Trident Hotel, the Chhatrapati Shivaji Terminus, Leopold Cafe, Cama Hospital,
Nariman House Jewish community centre, Metro Cinema, St Xavier’s College
and in a lane near the Times of India office, prompt an almost three-day siege
of the Taj, where gunmen remain holed up until all but one of them are killed
in an Indian security forces operation. More than 160 people are killed in the
attacks.

Ajmal Kasab, the only attacker captured alive, says the attackers were
members of Lashkar-e-Taiba.

In the wake of the attacks, India breaks off talks with Pakistan.

2009 – The Pakistani government admits that the Mumbai attacks may have
been partly planned on Pakistani soil, while vigorously denying allegations that
the plotters were sanctioned or aided by Pakistan’s intelligence agencies.
Pakistani Prime Minister Yousaf Raza Gilani and Indian Prime Minister Singh
meet on the sidelines of a Non-Aligned Movement (NAM) summit in Sharm el-
Sheikh, Egypt, issuing a joint statement charting future talks. Singh rules out,
however, the resumption of the Composite Dialogue Process at the present
time.

The Indian government continues to take a stern line with Pakistan, however,
with its coalition government saying that it is up to Pakistan to take the first
step towards the resumption of substantive talks by cracking down on activist
groups on its soil.

In August, India gives Pakistan a new dossier of evidence regarding the

Mumbai attacks, asking it to prosecute Hafiz Mohammad Saeed, the head of
Jamaat-ud-Dawa, an Islamic charity with ties to Lashkar-e-Taiba.

2010 – In January, Pakistani and Indian forces exchange fire across the LoC in
Kashmir, the latest in a string of such incidents that have led to rising tension
in the area.

In February, India and Pakistan’s foreign secretaries meet in New Delhi for
talks. This meeting is followed by the two countries’ foreign ministers meeting
in Islamabad in July.

In May, Ajmal Kasab is found guilty of murder, conspiracy and of waging war
against India in the Mumbai attacks case. He is sentenced to death.

2011 – In January, Indian Home Secretary GK Pillai says India will share
information with Pakistan regarding the 2001 Samjhauta Express bombing.
The two countries’ foreign secretaries meet in Thimpu, Bhutan, in February,
and agree to resume peace talks “on all issues”.

2012 – In November, India executes Pakistani national Kasab, the lone

survivor of a fighter squad that killed 166 people in a rampage through the
financial capital Mumbai in 2008, hanging him just days before the fourth
anniversary of the attack.

2013 – In January, India and Pakistan trade accusations of violating the

ceasefire in Kashmir, with Islamabad accusing Indian troops of a cross-border
raid that killed a soldier and India charging that Pakistani shelling destroyed a
home on its side.
2013 – In September, the prime ministers of India and Pakistan meet in New
York on the sidelines of the UN General Assembly. Both the leaders agree to
end tension between armies of both sides in the disputed Kashmir.

2014 – On February 12, India and Pakistan agree to release trucks held in
their respective territories, ending a three-week impasse triggered by the
seizure of a truck in India-administered Kashmir coming from across the de
facto Line of Control for allegedly carrying brown sugar.

2014 – On May 1, Pakistan’s Army chief General Raheel Sharif calls Kashmir
the “jugular vein” of Pakistan, and that the dispute should be resolved in
accordance with the wishes and aspirations of Kashmiris and in line with
UNSC resolutions for lasting peace in the region.

2014 – On May 25, Pakistan releases 151 Indian fishermen from its jails in a
goodwill gesture ahead of the swearing-in ceremony of Narendra Modi as prime
minister.

2014 – On May 27, Indian Prime Minister Narendra Modi holds talks with
Pakistan’s Prime Minister Nawaz Sharif in New Delhi. Both sides express
willingness to begin a new era of bilateral relations.

2015 – Modi makes a surprise visit to the Pakistani eastern city of Lahore on
Sharif’s birthday and the wedding of his grand-daughter.

2016 – India launches what it calls “surgical strikes” on “terrorist units” in

Pakistan-administered Kashmir in September, less than two weeks after an
attack on an Indian army base leaves 19 soldiers dead. Pakistan denies the
attacks took place.

In November, seven Indian soldiers are killed after rebels disguised as

policemen storm a major army base near the frontier with Pakistan.

2019 – In the early hours of February 26, India conducts air attacks against
what it calls Pakistan-based rebel group Jaish-e-Mohammad (JeM)’s “biggest
training camp”, killing “a very large number of terrorists”.

In February 2019, an attack on a convoy of Indian paramilitary forces in

Indian-controlled Kashmir killed at least forty soldiers. The attack, claimed by
Pakistani militant group Jaish-e-Mohammad, was the deadliest in Kashmir in
three decades. Two weeks later, India claimed to have conducted air
strikes targeting a terrorist training camp inside Pakistani territory. Pakistan
retaliated a day later with air strikes in Indian-administered Kashmir. The
exchange escalated into an aerial engagement, during which Pakistan shot
down two Indian military aircraft and captured an Indian pilot; the pilot
was released two days later.

Violence along the LOC peaked in 2020, with more than four thousand
reported cross-border firings. India also observed an increase in militant
recruitment, despite a slight drop in militant activity. However, tensions eased
following a February 2021 ceasefire that has since held. Nonetheless, New
Delhi continues efforts to bring Indian-administered Kashmir under its control.
In 2022 and 2023, it cracked down on independent media in the region, redrew
the electoral map to privilege Hindu-majority areas in Kashmir, and held a G20
tourism meeting in Srinagar. Targeted killings against Hindus have become
more frequent, motivating some to flee and protest government policies

At the May 2023 Shanghai Cooperation Organization summit in India, the

foreign ministers of India and Pakistan traded barbs over Kashmir, missing an
opportunity to improve relations. Furthermore, actions of the Pakistani military
against Imran Khan in early 2023 have raised concerns that Pakistani political
turmoil will fuel the arguments of Indian hardliners and hinder peace.

Separately, China has increasingly waded into the volatile region, stepping up
its own border dispute with India. In 2020, clashes broke out in the Galwan
Valley over territory in Ladakh, and another skirmish occurred in 2022 near
the countries’ Line of Actual Control in Arunachal Pradesh. The fighting has
prompted more militarization in the region, as India fears the prospect of a two-
front war with China and Pakistan.

1. Pakistan’s relation with India: strategic, economic Relations

What war could ravish, commerce could bestow

And he returned a friend, who came a foe
-Alexander Pope

India and Pakistan propose to expand economic linkages with each other
despite problems persisting in their political relations.

Trade Imperatives

In the post-Cold War period, nations have shifted the emphasis in their
domestic and foreign policies from politics to economics. This is evident from
the growth of regional economic blocs like the Association of South-East Asian
Nations (ASEAN), European Union (EU), North American Free Trade Area
(NAFTA). While these groupings had their origins prior to 1991, they gained
greater importance in the post-Cold War period. In the Indo-Pakistan context,
the role of the South Asian Association for Regional Cooperation (SAARC) has
also generated greater awareness among the political leaderships in the
subcontinent on the need to increase intra-regional cooperation and trade.
Moreover, an enlargement of India–Pakistan economic relations is imperative
for increasing the level of South Asian intra-regional trade flows as a whole.

On April 11, 1993, the SAARC member states signed an agreement on a South
Asian Preferential Trade Agreement (SAPTA) at the SAARC summit at Dhaka.
The agreement provides a broad framework of rules for a phased liberalization
of intra-regional trade. It envisages periodic rounds of trade negotiations for
exchange of trade concessions on tariff, para-tariff and non-tariff lines. Such
preferential trading arrangements imply a reduction of tariffs on trade among
SAARC member states. The eighth SAARC summit held in India had decided to
establish a South Asian Free Trade Area (SAFTA) on the lines of the European
Free Trade Area (EFTA) in order to liberalise intra-regional trade.

Professor Vijaya Katti writes, “Moving from SAPTA to SAFTA would, however,
require several initiatives on the part of the member states in many other areas
allied to trade. These include : trade facilitation measures like institutional
policy, regulations at border controls, transit facilities, trade document
procedures and financial procedures connected with trade play an important
role in the expansion of intra-regional trade.”

Significantly, in Pakistan the repeal of the Eighth Amendment to the

Constitution should curtail the military and bureaucratic role in Islamabad’s
foreign policy which would enable the leadership to take people-oriented
political decisions like promotion of bilateral trade. This is linked to the fact
that the Pakistani military is a major player in the national decision making
structure and has articulated the policy of peace first and cooperation later
with India.

Scope:

The attraction of mutual trading between the two sides is linked to low freight
costs which translates into cheaper prices, given the contiguous borders
between these two countries. In such a situation, a government keeping in view
the people’s interests, is obliged to ensure that commodities and merchandise
are imported only from such countries. The other conducive conditions are
cultural affinity, common language, similar economic and social systems which
provide an ideal foundation for broader India–Pakistan trade ties.
For instance, Pakistan imports iron ore from Brazil and Australia, besides tea
from Kenya at higher prices, though these items could be available at lower
rates from India. Similarly considering Indian pharmaceutical products are 30
per cent cheaper than Pakistani products, it would certainly make a difference
to the common citizen in that country. In turn, this would help Indian
pharmaceutical products to sell larger volumes in geographically proximate
markets, besides impacting positively on industrial growth.

Indian coffee which is now smuggled into Pakistan, due to the absence of
formal trade in the commodity, has scope of being a lucrative export item.
Pakistan is estimated to be the second largest tea consumer in the world with
market size of around 130-150 million kg per annum and for several years it
did not import tea from India.

Pakistan’s economy which is characterized by inadequate industrialization, has

created a demand-supply gap and drives both “black” and circular trade for
truck tyre exports from India. The size of the market in the country is one
million truck tyres annually and production facilities exist for only two lakh
tyres, of which half is taken by the government sector. This leaves only one
lakh truck tyres for sale in the open market.

India and Pakistan both being agrarian economies could cooperate in

agriculture which is a core component of the GDP and the largest employment
generation sector in either country. To quote, “It, therefore, makes sense for the
two countries to cooperate in areas of common interests as it would be to their
mutual advantage. Just as coal and steel were the ‘lead sectors’ in European
integration, there is every possibility of agriculture emerging as the major
sector in which cooperation and joint action can benefit both countries
especially in the context of the liberalisation of these sectors.”

The food and agri-business industry has a significant impact on the regional
economy. This industry has one of the highest economic multiplier effects
among the various industries, even ahead of the telecom or power sector.
According to an estimate, liberalised India–Pakistan trade in the agro-sector
would generate around 2.7 lakh jobs in India and 1.7 lakh jobs in Pakistan?.

An India–Pakistan track-two diplomacy group which comprises academics,

editors and former military leaders from both countries has made suggestions
to improve economic relations between both countries. These include: the two
countries should regularly pursue a joint gas pipeline project, encourage
tourism and convene a joint meeting of finance and commerce ministers from
both sides to promote bilateral trade.
Pakistan’s Perceptions

There are two view-points in Pakistan on boosting trade relations with India
and each has its own rationale to support their respective positions.

Pakistan’s traditional fears that trade relations with India would prove inimical
to its own interests is part of the problem. Pakistani Commerce Secretary
Iqbal Fareed? has stated, “ We cannot afford free trade with India as it would
badly hurt our industry”. This is linked to the fact that India with its much
larger industrial economy would result in an unfavourable balance of trade.
Viewed objectively, Pakistan’s bilateral trade flows have an unfavourable
balance not only with India but also with other industrial economies too.
Perhaps Pakistani trade planners are now realising the need to make their
economy globally competitive in the aftermath of the US sanctions after the
Chagai nuclear tests. In the process, India would then be perceived just as any
other trading nation and not necessarily as a hostile neighbour. Surprisingly,
Pakistani markets are not really flooded with Chinese products despite free
Pakistan-China trade.

The Lahore Chambers of Commerce and Industry study highlights the

disadvantages that would accrue to Pakistan in case free trade is allowed
between the two countries. Apart from these disadvantages the paper makes a
strong case for promoting trade ties with India.

India has a very stringent import policy and is seeking to increase exports at a
greater pace than imports

India has lower labour costs than Pakistan and thus has lower prodction costs.

India has several mills which are 100 per cent export-oriented and can freely
import raw materials from anywhere, including Pakistan. On the other hand,
Pakistan has tried to give a similar impetus to industry by providing export
processing zones, but no concrete outcome is yet evident.

The resources in Pakistan and India have many similarities. Consequently, in

world markets, we are competing countries rather than being able to
supplement each other’s deficits in resources.

According to Pakistani economist Ejaz Ahmad Naik, “A trade regime that

exposes the domestic market to international competition has to be an
essential element of Pakistan’s developmental strategy.” For Pakistan, it would
be appropriate to initially get exposure to regional competition which will not
be as stiff as international competition. On the other hand, dealing with
regional competition will enable Pakistani manufacturers and marketeers to
develop an orientation to international business with higher stakes. And India–
Pakistan trade offers Pakistan exactly such an opportunity to improve its
economy.

However, Ejaz Ahmad subsequently writes, “The sheer size (area, population,
resources and level of industrialisation) of India acts as a hurdle towards
achieving any arrangement of regional cooperation in South Asia...India being
by far the biggest country in the region, should lead the way and suggest ways
and means of removing the causes of friction in the political field and allaying
fears of its smaller neighbours in the economic sphere.” In this context, India
has already taken the initiative and accorded Pakistan MFN status and yet, the
economist is critical of India.

India–Pakistan trade potential is best reflected in an advertisment supplement

published in the mainline English daily newspaper Dawn of December 30,
1997, printed from Karachi and Lahore. This was the first ever trade report
published on India and it reflects the pulse of the Pakistani business
community to initiate trade with India. While governments have been known to
go wrong in gauging the thinking of citizens, newspaper advertising sales
managers can seldom afford to make such mistakes because such business
costs them money. Importantly, such supplements enable business
communities to develop market intelligence databases so necessary for trade
promotion.

A research paper prepared by the Karachi Chamber of Commerce and

Industry entitled, “Freer Trade With India: Raison d’ etre and Impact”
argues strongly in favour of Indo-Pakistan trade relations. The paper sees the
possibility of transfer of appropriate technology to Pakistan from India; besides,
that liberalised bilateral trade would give the two countries a bargaining chip in
negotiating with the developed countries. The reasons listed out are as follows:

 low cost capital and consumable inputs which would help to cover the
short fall in agricultural produce;
 labour wages in Indian manufacturing sector are two-thirds those in
Pakistan with better productivity;
 superior technology;

India–Pakistan trade ties also have a Central Asian dimension. According to

one view “ In case Pakistan agrees to let India and the Central Asian Republics
(CARs) trade through its territory and Afghanistan is accepted as a member of
SAARC as anticipated, the whole region, especially Pakistan-India relations,
would witness dramatic changes of both economic and political nature.” The
new CARs namely Kazakhstan, Uzbekistan, Tajikistan and Turkemenistan
have signed several bilateral trade and economic cooperation agreements with
India. However the continuing conflict in Afghanistan is preventing the
implementation of these non-political ties from taking shape with India. After
peace is restored to the region, “Pakistan will be pressed by the CARs into
granting trade transit facilities to India. In view of Pakistan’s own keenness to
set up close relations with the CARs in various fields, including trade, it will
hardly be able to resist this pressure.”

Pakistan’s Trade Policy

Pakistan’s trade policy is best understood in the context of its economy which
is more agriculture based than industry based. This is because the Indian
economy, prior to partition, was treated as a single entity and the regional
diversity resulted in a degree of interdependence. According to Professor B.M.
Bhatia, the region comprising Pakistan had surpluses in food grain, jute, finer
varieties of raw cotton and industrial raw materials which served as inputs to
the area now called India; whereas the Indian side supplied cotton cloth, coal,
steel and household products or manufactures owing to a comparatively higher
level of industrial activity. Thereafter, in the post-partition period, out of a total
of 14, 677 industrial units, only 1,414 units or 9.6 per cent of the total were
located in Pakistani territory; similarly, of the 3.14 million industrial workers
Pakistan’s share was only two lakh workers or 6.3 per cent of the total
manpower strength. The smaller industrial profile of Pakistan is highlighted by
the fact that prior to partition the manufacturing sector contributed only 5 per
cent of the total industrial production of undivided India, observes Professor
Bhatia.

At the time of partition, both India and Pakistan inherited economies which
were complementary in nature. However, their politically-driven economic
policies resulted in divergence as the two neighbours promoted competition
among themselves. For instance, Pakistan developed its cotton textile industry
soon after gaining nationhood and in the process obviated the need for
importing cotton manufactures from India. Instead, it competed with Indian
garments in international markets. Similarly, India also enhanced cotton
production levels and the resultant surplus enabled it to compete with
Pakistan in international markets. The other cases include sugar and leather
industries wherein Pakistan which was earlier dependent on India attained
self-sufficiency. Pakistan also developed an indigenous leather manufacturing
industry to eliminate the need to export raw leather hides and skins to India.

Pakistan’s economy was, therefore, resource rich and agro-based without an

adequately developed industrial infrastructure and lacked technology. Its
limited manufacturing capacity included a few textile mills, cement factories
and an oil refinery. Thus, its trade policies revolved around finding markets for
its commodities and acquisition of technology. In view of this, Pakistan’s trade
relations, like those of most developing countries, are primarily with the
Western industrialised democracies owing to its dependence on technology and
their reverse-dependency for raw materials. Yet the Western nations’ terms of
trade proved to be unfavourable and this prompted Pakistan to develop an
inward looking trade policy which resulted in a switchover of resources from
export-oriented policies to import-competing industries.

During the early 1950s Pakistan pursued an import substitution policy

wherein exports were not subsidised and this resulted in stagnation (decline in
some areas) in export earnings. This led to a change-over to an export oriented
policy “but the objective was only partially realised because the net protective
margin on import substitution industries was greater than that for export-
oriented industries. Thus, the overall impact of the revised policies was quite
limited.”

Islamabad’s import policy has been restricted through licensing and

quantitative constraints and tariffs have been used mainly to generate
revenues. The country started exports of manufactured items only during the
early 1960s with the introduction of an export bonus scheme. Eventually,
almost two-thirds of the total exports were manufactured by the end of the
decade. Pakistan, it would appear in this context, has never really had a proper
and planned economic policy to promote trade and instead has alternated its
approach between an internal and external orientation. A major step to boost
trade relations is to develop strong trade ties with regional countries and,
therefore, Pakistan focussed on South-west Asia rather than South Asia due to
politico-religious reasons. It is a member of the Economic Cooperation
Organisation (ECO) which includes Iran, Turkey and the CARs alongwith
Afghanistan also became members. However, in the 1990s, Pakistan slowly
began trading with new partners like India and Bangladesh and shifting away
from Sri Lanka.

Problems
Though political relations are an impediment to bilateral trade ties, the
role of vested economic interests perpetuating the present Indo-Pakistan
“black” trade also become relevant as they amount to pressure groups
which prefer to sustain the status quo to their advantage. This refers to
the nexus of the politician-businessman-criminal-official who collectively
make money from smuggling activity through bribery and corruption of
officialdom to sustain the flow of illegal trade. It results in a loss of
revenue like customs duties, sales tax and income tax to both
governments but in turn enhances the profit margins of traders on both
sides.

Commerce Minister Rama Krishna Hegde stated in Parliament on July 28,

1998, that Pakistani intelligence harassed businessmen who attempted to
contact the commercial wing of the Indian High Commission at Islamabad.
Such state sponsored moves are serious obstacles to the growth of bilateral
trade ties. More recently, on April 21, 1999, the Indian commercial attache,
Ravindranath, at the Indian High Commission in Islamabad was assaulted by
Pakistanis while on a visit to Lahore.

The MFN Status Issue

Today, India–Pakistan trade which has a phenomenal potential, is stymied

through tariff differences and a Pakistan imposed restriction on Indian imports
to only 600 items. Summing up the reason for ‘suppressed’ India–Pakistan
bilateral trade flows, P. Chidambaram, then minister of state for commerce,
stated in December 1995 in the Rajya Sabha that this was due to the Pakistan
government’s restrictive policy for imports from India. It currently allows
imports from India only against a list of 570 items many of which do not have a
real export potential from India, he said. Under these circumstances, it is not
feasible to formulate a promotion strategy for trade with Pakistan, even if there
is vast scope. The Indian government has made a formal demarche to the
Pakistan government about the MFN status, and it awaits a response,
Chidambaram added. MFN status stipulates that the contracting parties have
to accord each others’ exports and imports the same tariff and trade
restrictions which are given to other nations.

While India has taken the initiative and already granted Pakistan MFN status,
this economic initiative has not yet been reciprocated and thereby constricts
natural trade flows between the two sides. Today there are three views in
Pakistan about liberalising trade with India. Significantly, a section of
economists and businessmen advocate trade with India as they feel that it
would be a mutually beneficial proposition. However, another group of
businessmen does not favour trade ties which are considered synonymous with
an Indian economic invasion. Finally, the security services are opposed to
economic relations with India for purely political reasons. They feel that
bilateral trade ties should be formed only after the Kashmir problem is solved
between the two nations.

Pakistani Commerce Minister Ishaq Dar, commenting on the reciprocation of

MFN status to India told media persons in 1998, “We have neither given nor
have intention to give it. We are not bound to give them MFN status. The
government does not deem it proper to give MFN status to India.”

In reality, Pakistan’s trade policy towards India goes against the World Trade
Organisation (WTO) rules wherein a country accorded MFN status by another
one is under obligation to reciprocate the same. However, Pakistan has chosen
to flout this rule of international economic diplomacy vis-à-vis India despite
being a signatory to the WTO agreement. While India on its part has not yet
raked up the issue with a multilateral forum, it has reminded Pakistan about
this discriminatory trade policy.

A distinguished Pakistani economist, the late Mahbub-ul-Haq had stated,

“Pakistan is totally wrong in denying non-discriminatory trade to India. It is an
inferiority complex. If we can compete with other developed nations , why can’t
we compete with India”, he told a reporter from the Indian news agency, the
Press Trust of India (PTI).

Pakistan had set two pre-conditions for according India MFN status: one
external and the other internal. The external condition was that New Delhi
must stop subsidising manufacturers/exporters; and the internal condition
was that Pakistani industry prepares itself to compete with Indian imports.
Some Pakistani manufacturers feel that Indian industry gets massive
incentives on raw material and other inputs which gives it a competitive edge
against them. Prospects for India–Pakistan free trade by 2000 appear bleak
with Islamabad subscribing to a section of the business community’s view that
trade with India would hurt the Pakistani economy.

The reported reason underlying Islambad’s decision to withhold MFN status is

because the Pakistani security services are not keen on initiating a policy of
trade and cooperation with New Delhi till the Kashmir problem is settled
between the two countries. Probably, the Pakistani security services believe
that once Indo-Pakistan trade ties take shape, the Kashmir issue could recede
from public memory and could cease to be an issue within the country. 29
According to newspaper reports Islamabad is keen on a treaty to avoid double
taxation. Perhaps this could be interpreted as a face-saving device to promote
bilateral trade with India while publicly maintaining that the MFN status will
not be given to India. About 47 agreements/protocols/treaties have been
signed between Pakistan and India, out of which 20 agreements are purely
related with Trade and Business normalization between both countries. In the
latest reports, Pakistan Total Imports recorded 4.5 USD bn in Aug 2023. Total
Exports reached 2.4 USD bn in Aug 2023, which registered an increase of 26.9
% year on year. Pakistan Trade Balance recorded a deficit of 2.1 USD bn in Aug
2023.

Conclusion

Over the years, as a new post-partition generation comes of age in Pakistan,

the mindset towards India is bound to change. Perhaps they would ensure that
economic considerations in terms of trade opportunities with India override
emotional ones about partition traumas. Such attitudinal shifts in the future
are likely to contribute to an improvement in Indo-Pakistan trade ties. A few
suggestions towards improving the growth of bilateral trade are listed here:

Relax visa/travel regimes between the two countries wherein

citizens/businessmen are given city specific visas and have to report to the
police authorities periodically during their stay in either country. Instead there
should be multiple entry visa facility which would ease travel restrictions in a
major way.

Positive media reportage would also help in creating better impressions in the
minds of visitors to each other’s countries. While democratic governments in
either country have no direct control over news media, journalists invariably
tend to pick up news leads informally from officialdom about the other country.
Probably enforcement of a “zero-interaction” policy between officials not
authorised to talk to the press could prove effective in projecting a better
national image of the other country.

Land routes—road/rail—are more beneficial than sea borne trade for India–
Pakistan trade flows. The long distances from the port city of Karachi to the
hinterland by road/rail may prove to be uneconomical in comparison to the
shorter distances directly through the contiguous land borders between the
two sides.
Regular interaction between businessmen is necessary as a mechanism to
gather market intelligence. These meetings should ideally take place
independently of political summiteering between the two sides. Such meetings
enable businessmen to understand the strengths, weaknesses, opportunities
and threats of their competitors which is essential for successful negotiations
that eventually translate into higher trade statistics.

The last time that the neighbours focussed on economic relations was in early
1996 when business delegations exchanged visits to each others’ country.
Perhaps the political will to come closer was not as strong then as it is in the
post-nuclear period. In the present period, both countries have attempted to
adopt more pragmatic policies towards each other and intra-regional trade is
an effective means to dilute their mutual mistrust and suspicion ingrained over
the past five decades. Importantly, India–Pakistan economic relations would
kick-start SAARC intra-regional trade and thereby, transform the regional
states into a powerful economic bloc. Hopefully, Prime Minister Nawaz Sharif
being a businessman 32 turned politician would prioritise trade with India
more than a “plain” politician at the helm of affairs in Pakistan.

India Pakistan relations UPSC

In this article, you can read about several issues concerned with India’s
relations with its neighbour Pakistan.

The India Pakistan relations are one of the most complex associations that
India shares with any of its neighbouring countries. In spite of the many
contentious issues, India and Pakistan have made major strides in reducing
the “trust deficit” over the past few years.

India desires peaceful, friendly and cooperative relations with Pakistan,

which requires an environment free from violence and terror. The two countries
share linguistic, cultural, geographical and economic links but due to political
and historical reasons, the two share a complex relation.

ndia Pakistan relations UPSC

In this article, you can read about several issues concerned with India’s
relations with its neighbour Pakistan.

The India Pakistan relations are one of the most complex associations that
India shares with any of its neighbouring countries. In spite of the many
contentious issues, India and Pakistan have made major strides in reducing
the “trust deficit” over the past few years.
India desires peaceful, friendly and cooperative relations with Pakistan,
which requires an environment free from violence and terror. The two countries
share linguistic, cultural, geographical and economic links but due to political
and historical reasons, the two share a complex relation.

A Brief Background of India-Pakistan Relations

Ever since India’s independence and the partition of the two countries, India
and Pakistan have had sour relations. Discussed below is a brief timeline of the
relations between the two countries:

 The Composite Dialogue between India and Pakistan from 2004 to 2008
addressed all outstanding issues. It had completed four rounds and the
fifth round was in progress when it was paused in the wake of the
Mumbai terrorist attack in November 2008.

 Then again in April 2010, then Prime Minister Manmohan Singh and
Pakistani PM Yousuf Raza Gillani on the margins of the SAARC Summit,
spoke about the willingness to resolve the issue and resume the bilateral
dialogue.

 In 2011, after a meeting between the Foreign Ministers of both the

countries, the bilateral ties were resumed on issues including:

 Counterterrorism & Humanitarian issues

 Economic issues at Commerce

 Tulbul Navigation Project at Water Resources Secretary-level

 Siachen at Defence Secretary-level

 Peace & Security including Confidence Building Measures (CBMs)

 Jammu & Kashmir

 Promotion of Friendly Exchanges at the level of the Foreign

Secretaries.

 Cross LoC travel was started in 2005 and trade across J&K was initiated
in 2009

 India and Pakistan signed a visa agreement in 2012 leading to

liberalization of bilateral visa regimes between the two countries
Conflict Zones between India and Pakistan
There have been a few constant factors which have led to the complex bilateral ties
between the two countries. Discussed below are these factors as per the latest
developments released by the Government authorities, as of February 2020:

Cross-border Terrorism
 Terrorism emanating from territories under Pakistan’s control remains a core concern in
bilateral relations
 India has consistently stressed the need for Pakistan to take credible, irreversible and
verifiable action to end cross border terrorism against India
 Pakistan has yet not brought the perpetrators of Mumbai terror attacks 2008 to justice in the
ongoing trials, even after all the evidence have been provided to them
 India has firmly stated that it will not tolerate and comprise on issues regarding the national
security
 Based on attacks in India and involvement of the neighbouring country, the Indian Army had
conducted surgical strike at various terrorist launch pads across the Line of Control, as an
answer to the attack at the army camp in Uri, Jammu and Kashmir
 India had again hit back over the cross border terror attack on the convey of Indian security
forces in Pulwama by carrying out a successful air strike at a training camp of JeM in
Balakot, Pakistan

Cross border terrorism is one of the biggest factors for the disrupted relations between
India and Pakistan.

Trade and Commerce

The figures for India Pakistan bilateral trade in the last 6 years is as follows:

The trade agreement has also faced a downfall when it comes to the relations
between India and Pakistan. In 2019, after the Pulwama terror attack, India
hiked customs duty on exports from Pakistan to 200% and subsequently,
Pakistan suspended bilateral trade with India on August 7, 2019.

There are two major routes via which trade is commenced between the two
countries:

Sea Route – Mumbai to Karachi

Land Route – via Wagah Border through trucks

Indus Waters Treaty

The 115th meeting of Permanent Indus Commission (PIC) was held on August
29 and 30, 2018 in Lahore. The Indian delegation was led by the Indian
Commissioner for Indus Water (ICIW), while the Pakistan delegation was led by
Pakistan Commissioner of Indus Water (PCIW).

In the two days meeting both sides discussed Pakal Dul Hydroelectric Power
Project (HEP), Lower Kalnai HEP and reciprocal tours of Inspection to both
sides of the Indus basin. Subsequently, a delegation led by PCIW inspected
Pakal Dul, Lower Kalnai, Ratle and other hydropower projects in the Chenab
Basin between January 28 and 31, 2019.

Read in detail about the Indus Water Treaty at the linked article.

People to People Relations

Since 2014, India has been successful in the repatriation of 2133 Indians from
Pakistan’s custody (including fishermen), and still, about 275 Indians are
believed to be in their custody

In October 2017, the revival of Joint Judicial Committee was proposed by India
and accepted by Pakistan, wherein, the humanitarian issues of custody of
fishermen and prisoners, especially the ones who are mentally not sound in
each other’s custody need to be followed
The Bilateral Protocol on Visits to Religious Shrines was signed between the
two countries in 1974. The protocol provides for three Hindu pilgrimage and
four Sikh pilgrimage every year to visit 15 shrines in Pakistan while five
Pakistan pilgrimage visit shrines in India.

Kartarpur Corridor

An agreement between India and Pakistan for the facilitation of pilgrims to visit
Gurdwara Darbar Sahib Kartarpur, Pakistan, was signed on 24 October 2019
in order to fulfil the long-standing demand of the pilgrims to have easy and
smooth access to the holy Gurudwara

The Kartarpur Sahib Corridor Agreement, inter alia, provides for visa-free travel
of Indian pilgrims as well as Overseas Citizen of India (OCI) cardholders, from
India to the holy Gurudwara in Pakistan on a daily basis, throughout the year.

On November 9, 2019, on the occasion of the 550th birth anniversary of Guru

Nanak Dev ji, Prime Minister Narendra Modi inaugurated the corridor

Kashmir Issue

This is one of the most sensitive issues between India and Pakistan and has
been a major cause of the sour relations the two countries share. Article 370
gave Jammu and Kashmir a special right to have its own constitution, a
separate flag and have their own rules, but in August 2019, the Article was
scrapped off and J&K now abides by the Indian Constitution common for all. It
was given the status of a Union Territory and this move of the Indian
Government was highly objected by Pakistan due to their longing of owning
Kashmir entirely.

Trade Agreement between India and Pakistan

The two countries had signed a Trade agreement which was mutually beneficial
for both. Discussed below are the ten Articles of the Trade Agreement:

Article I – exchange of products shall be done based on the mutual

requirement of both the countries, ensuring common advantages

Article II – With regard to the commodities/goods mentioned in Schedules ‘A’

and ‘B’ attached to this Agreement, the two Governments shall facilitate
imports from and exports to each other’s territories to the extent permitted by
their respective laws, regulations and procedures
Article III – The import/export shall take place only through commercial
means approved by both side

Article IV – With respect to commodities/goods not included in Schedules ‘A’

and ‘B’ export or import shall also be permitted in accordance with the laws,
regulations and procedures in force in either country from time to time

Article V – Each Government shall accord to the commerce of the country

Article VI – There are a few exceptions for Article V

Article VII – The General Agreement on Tariffs and Trade must be followed

Article VIII – Border trade shall be allowed for the day-to-day requirement of
commodities

Article IX – For proper implementation of the agreement, meetings can be

done every six months

Article X – The Trade Agreement between the two countries waa effective from
February 1, 1957
Pakistan’s economy has been in crisis for months, predating the summer’s
catastrophic floods. Inflation is backbreaking, the rupee’s value has fallen
sharply, and its foreign reserves have now dropped to the precariously low level
of $4.3 billion, enough to cover only one month’s worth of imports, raising the
possibility of default.

3. Flood recovery

A “monsoon on steroids” – directly linked to climate change – caused a summer

of flooding in Pakistan so catastrophic that it has repeatedly been described as
biblical. It left a third of the country under water – submerging entire villages –
killed more than 1,700, destroyed homes, infrastructure, and vast cropland,
and left millions displaced.

More than four months after the worst of the flooding, nearly 90,000 people are
still displaced from their homes, and the floodwater is still standing in some
areas. It would be enormously difficult for any country to recover from such a
disaster and rebuild lost infrastructure, including roads and schools, let alone
a government dealing with a cash crunch like Pakistan’s.

But the Pakistani government – in particular the foreign minister Bilawal

Bhutto Zardari, who has visited the United States twice since the summer, and
the minister for climate change, Sherry Rehman – has done an admirable job
bringing awareness of the flooding catastrophe to the world stage. A donors’
conference Sharif co-hosted with the United Nations Secretary General Antonio
Guterres in Geneva this month raised pledges for more than $9 billion for flood
recovery over the next three years (the money is mostly in the form of project
loans). Pakistan has also played an important role in discussions about the
devastating effects of climate change on developing nations, spearheading the
effort to place loss and damage on the agenda at COP27 for the first time, and
pushing for COP delegates in Egypt to agree to a loss and damage fund.

With billions of dollars in help promised, the government has passed one
hurdle. But the road for recovery ahead will be tough: Displaced people are still
sleeping under open skies in Sindh province. Implementing a sustainable
recovery will require enormous capacity, resources, and transparency in a
country already mired in other troubles.

Mounting insecurity

The Pakistani Taliban (or TTP), the terrorist group responsible for killing tens of
thousands of Pakistanis from 2007 to 2014, have been emboldened –
predictably so – by a Taliban-ruled Afghanistan, and once again pose a threat
to Pakistan, albeit in a geographically limited region (for now). The group
engaged in at least 150 attacks in Pakistan last year, mostly in the northwest.
Because the TTP have sanctuary in Afghanistan, the Pakistani state
increasingly finds itself out of options when it comes to dealing effectively with
the group. The state’s negotiations with the TTP have failed repeatedly, as they
are bound to, because the group is fundamentally opposed to the notion of the
Pakistani state and constitution as it exists today. The Afghan Taliban have,
unsurprisingly, also not proved to be of help in dealing with the TTP – and
Pakistan’s relations with the Afghan Taliban have deteriorated significantly at
the same time over other issues, including the border dividing the two
countries.

At this point, Pakistan’s first preference will be to strike kinetically at TTP

targets within its borders, but that will be limited by TTP movement across the
border into Afghanistan. That movement is what leaves Pakistan with the
difficult-to-resolve TTP issue and complicates things beyond the military
operation it launched against the group in 2014. Still, the Pakistani Taliban at
this point is not the biggest threat Pakistan faces, given the country’s major
political and economic challenges – but left unchecked, it could morph into a
significant crisis.

Trade Structure in Pakistan:

Pakistan and India are the two most populous and largest economies in the
South Asian region. Being the dominant constituents of SAARC, both have a
great potential for intra-regional trade. Presently, trade between Pakistan and
India is taking place through three channels. The formal trade, through
official means is marginal; illegal trade takes place through smuggling via
porous Indo-Pak land borders and through Afghanistan; trade also takes
place through third countries. These include mainly Dubai and Singapore,
which are free ports and accommodate legal agents of traders from both India
and Pakistan.

Official Trade

To date, the magnitude of official trade between Pakistan and India remains
negligible compared to their respective global trade volume and neither country
falls in the category of top ten trading partners of each other. This is partly due
to their history of being relatively closed economies, but more importantly, past
political frictions have influenced their mutual trade relations. Support your
answer with current valid references and evidences:

As for bilateral trade, Pakistan’s total merchandise trade with India (imports
plus exports) contributed a meager 3 percent (on average) of the overall trade
during the last five years ending 2004-05.The share of India in Pakistan’s total
exports remained less than one percent, whereas in total imports, it fluctuated
within a narrow range of 1.24 to 2.66 percent (see Table 1). Similarly, the share
of Pakistan in India’s total exports averaged 0.45 percent whereas in imports it
constituted only 0.11 percent during the period 1999-00 to 2003-04. During
FY05, Pakistan accounted for only 0.63 percent of India’s total exports worth
$79.2 billion to the rest of the world and 0.09 percent of the Indian total
imports equivalent to $107.1 billion.

The growth in bilateral trade over the years has also been dismal and quite
volatile. In absolute terms, Pakistan’s exports to India (except for FY99) have
remained low, and on average have amounted to $70 million per annum during
the decade ending FY04, with an average variation of around $41 million. On
the other hand, Pakistan imported, on average, $176 million worth of goods
from India, resulting in a persistent trade deficit (except in FY99) against
Pakistan.

The commodity-wise composition of Pakistan’s trade with India during the past
five years ended FY04 indicated that, on average, over 90 percent of Pakistan’s
exports to India fall under just six broad categories and accounted for 40
percent of the total number of items exported in a year Out of six, the two
broad categories of Pakistan’s major exports to India consist of edible fruits
and nuts (fresh and dry) and vegetables roots/tubers. Fruits and dry fruits
alone contributed, on average, 45 percent of the total exports to India during
the last five years. Generally, Pakistan’s exports consist of more raw material
than finished products. These consists mainly of edible fruits and nuts
(fresh/dry), crude vegetable material (vegetables roots/tubers), cotton, other
made up textiles articles, woven cloth, and oil seeds (miscellaneous grains and
fruits). In addition to these items, some other items have been exported
occasionally which include: cereals, sugar and sugar confectionary, wool fine/
coarse and animal hair, petroleum products (mineral fuel/oil/wax and
bituminous), natural pearls and other precious stones, tin and articles, etc.
The total number of items being exported to India rose from 140 in FY00 to 203
in FY04.

On the other hand, a commodity-wise break-up of Pakistan’s imports from

India shows that about 49-58 percent of the total number of items imported in
a year accounted for about 91 percent of the aggregate value of imports.
Pakistan’s major imports from India cover a wide range of products. The items
in the category of industrial raw material include: organic chemicals,
residue/waste from food industry, iron and steel, rubber and plastics articles,
tanning and dyeing material, etc. (Annexure II). While some other major items
cover various kinds of coffee, tea and spices, there have been some occasionally
imported items such as sugar and sugar confectionary, cotton, vegetables or oil
seeds, pharmaceutical products, etc. Over the years, the share of organic
chemicals imports have increased, which on average stood close to one-third of
the total imports. However, during the last two years, the import of iron ores,
slag and ashes has been quite significant, with a share of 12.2 percent in FY03
and 8.1 percent in FY04. Moreover, the total number of items being imported
from India has also increased over time. The import list covered 716 items
during FY04, which was 60.2 percent higher than the 447 items on the list in
FY00.

Informal Trade

Informal trade generally takes place due to the following reasons: i) restrictions
on import of specific items for various reasons such as health issues, religious
beliefs oreconomic reasons; (ii) high tariff barriers or transportation costs
which make it cost effective to smuggle the goods in the country; and (iii)
imposition of non-tariff barriers such as quantitative restrictions; (iv)
weaknesses in the ‘rules of origin’ resulting in trade routed through a third
country; (v) leakages in transit trade; (vi) distortions in domestic policies such
as the absence of or relatively low indirect taxes in a country which create an
incentive to transport items illegally to neighboring countries. The
smugglers/traders mainly carry out the informal trade between Pakistan and
India through the exchange of goods at the Indo-Pakistan border as well as
through the misuse of the personal baggage scheme through the “green
channel” facilities at international airports or railway stations. Informal trade is
also taking place through Afghanistan whereby goods are exported officially
from India to Afghanistan and later on smuggled into Pakistan through
Peshawar, which lies close to the Pakistan-Afghan border. Indian-made goods
which are being smuggled into Pakistan include cosmetics, alcoholic beverages,
stainless steel utensils, ayurvedic medicines (30 percent cheaper in India),
videotapes, cassettes, confectioneries and cashew nuts, tea and coffee, live
animals and spices.

Informal traders in both the countries have developed efficient mechanisms for
information flow, risk sharing and risk mitigation. The three important factors
viz. quick realization of payments, zero documentation and no procedural
delays are contributing to lower transaction costs in the informal channel. The
principal implication of this informal trade is that unless the environment of
the formal trade improves, informal trade will not only continue to coexist with
formal trade, but it will also impact its potential magnitude in the coming
years.

The report, commissioned by the United States Institute of Peace, examines the
Indus Waters Treaty and its role in contemporary international hydropolitics in
the Indus basin, paying particular attention to the most recent river
development projects on the Indian side of the Indus’s three western
tributaries. Conflicts around contemporary large-scale water development
projects in the Indian and Pakistani parts of the Indus basin are also reviewed.
Arguing against assumptions about the inevitability of conflict over water
because of its future absolute scarcity, this report finds that, on the
international level, the lack of transparency in data sharing between India and
Pakistan and the trust deficit between them have real potential for
accentuating tensions in the aubcontinent. It also finds that, on the
subnational level, focus on the supply side of water management and pervasive
inequities and inefficiencies in water distribution in both India and Pakistan
have the potential to drive interprovincial conflict in Pakistan.

As a result of the partition on August 15, 1947, the headworks of two

important canal systems were left in Indian territory, and the command areas
in Pakistani territory. In the absence of any arrangement for the sharing of
water in those canal commands, the two countries concluded a “standstill
agreement,” which provided for the maintenance of existing flows until March
31, 1948, to allow time to reach a longer-term settlement. However, the
agreement lapsed without settlement, and the very next day the provincial
government of Indian Punjab suspended supplies to Pakistan. This suspension
of water was seared into the Pakistani consciousness as evidence of Indian
desire to undermine the fragile new dominion of Pakistan.7 The supplies were
restored eighteen days later, and soon after the two countries concluded what
came to be known as the Inter-Dominion Agreement, which called for
continued negotiations for a final settlement of the water issue. This brief
episode of the suspension of water supplies alarmed the Pakistani water
bureaucracy into initiating the Bombanwala-Ravi-Bedian-Dipalpur (BRBD) link
canal project, which would allow flows from the Ravi River to be diverted to the
Sutluj. Significantly, this project demonstrated to Pakistani engineers the
viability of compensatory interriver water transfers—a lesson that was to be at
the core of Pakistan’s postion during the IWT negotiations.

Indus Waters Treaty Thanks to the active mediation and financial support of
the World Bank and the Western powers, led by the United States, India and
Pakistan signed the IWT in 1960, allocating the entire flow of the three eastern
tributaries of the Indus River—Ravi, Sutluj, and Beas—to India and the three
western tributaries—Indus, Jhelum, and Chenab—to Pakistan. The World
Bank rewarded both Pakistan and India with massive aid inflows to build
storage and conveyance facilities to provide remedial water supplies for the
flows that were supposedly lost to the other country.

The IWT was a trilateral treaty between, India, Pakistan, and the World Bank.
It was concluded in an atmosphere of considerable mutual suspicion,
particularly in the context of Pakistan’s paranoia about the upper riparian—
India’s—ability and intentions to deprive Pakistan of water. Nationalist
engineers negotiated the IWT, and the treaty did not concern itself with more
contemporary principles of equitable sharing of water between riparians.
Rather, the treaty mirrored the political landscape of the time by simply
dividing the basin between the two countries instead of providing for
meaningful cooperative management or sharing. As mentioned, India was given
rights to the three eastern rivers of the Indus basin and Pakistan was given full
rights to the three western rivers. Pakistan’s rights on the three western rivers,
however, acknowledged customary use of water in the Indian territory and
allowed for limited diversion for agricultural purposes and for run-of-the-river
electricity generation projects. It is the IWT provisions allowing India limited
use of the three western rivers that has caused the most conflict. The IWT
provides for specific coordination mechanisms through the Indus Commission,
with dispute resolution to pass in a stepwise fashion from the Indus
Commission, which is composed of Indian and Pakistani representatives and
administers the IWT, to the governments of India and Pakistan, to a neutral
expert, and then to a Court of Arbitration.

The key feature of the IWT was its extensive technical annexures, which are
typically interpreted very literally by Pakistani engineers, whereas Indian
engineers tend to emphasize the treaty’s criteria for techno-economically sound
project design. For example, as will be illustrated later, the IWT’s technical
annexures do not allow for substantial storage on projects on the three western
rivers upstream of Pakistan. The treaty also puts strong limitations on
structures with movable gates that could manipulate the storage upstream of
Pakistan in any project on the three western rivers of the basin. But, given the
high seasonal flow variability of the Indus basin rivers, which also carry some
of the highest silt loads in the world, projects often simply cannot be
technically or economically viable without a liberal interpretation of the
limitations on those regulating structures, such as movable spillway gates.
This issue is further elucidated later in this report, in the context of the first
episode of resorting to the neutral expert by India and Pakistan.

The massive water development carried out in both India and Pakistan as part
of the Indus Basin Water Development Project in the aftermath of the IWT
provided a temporary boon to agricultural water supplies in the basin. But one
of the more obvious hydropolitical implications of the IWT was the capacity of
the two governments to build infrastructure with more overt security
implications. The military functionality of canals is well known on the Pakistani
side as well, where canals are often operated to simulate flooding during
military exercises to the detriment of their supposed function as irrigation
water suppliers.

Dispute Resolution under the IWT Rubric

The IWT has been relatively successful, at the very least by virtue of surviving
two and a half wars and frequent military mobilizations by India and Pakistan.
But some of the disputes that arose in the context of the treaty are also
indicative of the nature of the treaty and the nationalist-driven hydropolitics of
the basin, which are further inflected by the supply-side engineering bias of the
water managers of the two countries. In this case, supply side means a
simplistic equation whereby growing populations must be provided additional
water supplies by enhancing the supply of water through storage or more water
control structures and not through gains in use efficiency or intersectoral
water transfers. Relatively early on, for example, there was disagreement over
Indian plans to build the Salal hydroelectric project on the Chenab River. After
negotiations at the governmental level, the Pakistanis accepted the project in
the 1970s. Subsequently, the Tulbul/Wullar project on the Jhelum River from
the early 1980s and the Baglihar hydroelectric project on the Chenab River
from the late 1990s became prolonged sources of disagreement. Because of
Pakistani objections, work on the Tulbul/Wullar project was stopped in the
1980s, and the project is still a subject of negotiations between the two
governments. On the Baglihar project, however, the government of Pakistan
invoked the arbitration clause for the first time in the treaty’s history in
2005.16 Pakistani objections to the Baglihar regarded primarily the technical
specifications of the run-of-the-river project—that is, a river project without
dams or storage. Although the project was initiated in 1992, the Pakistanis did
not object to it until 1999, when they complained about changes in the design
of the project on which they had not been consulted. The Indians protested
that the changes were necessary for the techno-economic viability of the
project. The public view in Pakistan, however, was that India was somehow
trying to dam the Chenab River, which was Pakistan’s by virtue of the IWT,
whereas Indians viewed Pakistani objections as yet another example of
Pakistanis’ negativism about any legitimate Indian project on the three western
tributaries.17 The dispute was a manifestation of the different interpretations
the two countries’ engineers had of the treaty. In the words of a former Indian
secretary for water resources, Ramaswamy Iyer,

Pakistan regards the western rivers as its rivers under the treaty, and tends to look with
jaundiced eyes at any attempts by India to build structures on those rivers. Structures give
control, and Pakistan is reluctant to agree to India acquiring a measure of control over those
rivers, that stand allocated to Pakistan. The treaty gives Pakistan virtually a veto power over
Indian projects on the Western rivers, which Pakistan tends to exercise in a stringent rather
than accommodating fashion.

Pakistani possessiveness about the western rivers notwithstanding, it is also a

fact that much of Pakistan’s technical objections to projects such as Baglihar
are informed by security concerns, such as India’s potential ability to impound
water during low-flow winter months and/or to release excess water during
high-flow months to cause flooding in downstream Pakistan. India of course
protests (1) that it cannot flood Pakistan without flooding itself first, (2) that the
water projects are necessary for the development of the disputed state of
Jammu and Kashmir, and (3) that the design elements of the Baglihar are
necessary for the safety and techno-economic viability of the project. The
neutral expert appointed by the World Bank to resolve the dispute gave his
binding decision on the Baglihar dispute in 2007, essentially accepting some of
the Pakistani concerns by asking India to respond to them but rejecting other
concerns. This allowed the project to go forward with some design changes.19
Both the countries claimed the neutral expert’s decision as a victory, though
the Indians had more of a cause for such a claim, because the neutral expert
conceded the fundamental design issues of the impounding of water and the
location of the movable spillway gates for the project.

China-Pakistan Economic Corridor (CPEC)

China-Pakistan Economic Corridor (CPEC), providing Pakistan with enormous

opportunities to uplift its dilapidated economic condition and offering China
with another opening in the Indian Ocean through the Gwadar Port in
Balochistan

The CPEC offers Pakistan with abundant economic opportunities

to ease out its financial distress and

provides China with another opening in the Indian Ocean through the
Gwadar Port. It promises

to modernize Pakistan’s infrastructure and

improve its connectivity within the region and beyond from the Chinese
province of Xinjiang to Middle East, Europe and Africa

Pakistan is obviously shifting from geostrategic considerations to geo-

economic cooperation, focussing on strong relationship with major regional
actors.

Despite its phenomenal benefits, there are few factors that are obstructing the
CPEC completion such as 1)- political instability in Pakistan; 2)-delayed
decision making in few projects, particularly ML11; 3)-bad governance and
corruption 4)-resurgence of militancy; 5)-the COVID-19 pandemic (Rafiq,
2021). Among all, the new wave of militancy is the most worrisome issue both
for Beijing and Islamabad as multiple attacks on the CPEC-related projects
have not only slowed down the pace of the project but has upset the Chinese
workers.

The Baloch militants along with other miscreants and religious militants are
the main culprits. The Balochistan Liberation Army (BLA) has conducted a
series of attacks, including on i)- the Chinese Consulate located in Karachi
in 2018, ii)-Pearl Continental Hotel in Gwadar on 11 May 2019, , iii)-
Pakistan Stock Exchange (three Chinese companies at the time owned
40% of the stakes) in 2020, iv)- A roadside IED bomb blast in Mat area of
Dera Bugti, Balochistan in 2022, and v)- now the recent terrorist attack on
security forces in Panjgur and Nushki districts in 2022, The assault lasted
four days and left 20 militants and nine Pakistani soldiers dead. Tehreek-i-
Taliban Pakistan (TTP), Baloch Liberation Front (BLF) and Baloch Nationalist
Army (BNA) are also involved in militant attacks on LEAs, state infrastructure,
CPEC projects, civilians, both Pakistani and Chinese vi) In April 2022, a
suicide bombing woman from BLA hit a van near the University of Karachi's
Confucius Institute, killing three Chinese academics and their Pakistani
students.

China’s BRI is a strategic move to attain a permanent road into Eurasia and
dominant presence in its sea-based lines of supply. To make it a reality, China
has engaged more than 60 countries, with a population of 4.4 billion
people, building six economic corridors connecting China with other
economies. They are: 1). China–Mongolia–Russia Economic Corridor
(CMREC); 2). New Eurasian Land Bridge (NELB); 3). China-Central Asia-
Western Asia Economic Corridor (CCWAEC); 4). China–Indo–China
Peninsula Economic Corridor (CICPEC); 5). ChinaPakistan Economic
Corridor (CPEC); and 6). Bangladesh-China-India-Myanmar Economic
Corridor (BCIMEC) (Ghiasy and J Zhou 2017, p.2; OECD, 2018, p. 3; Javaid
2016, p. 256). China’s presence at important ports like Hambantota,
Djibouti and Gwadar offer it with maritime access in new ways that
protects its supplies of natural resources and expands its outreach (Sloan,
2017, p. xiv). Inevitably, this has provided China a greater role both in regional
and global economic and strategic affairs, thus transforming it into an
amphibious power.

The CPEC is a 3,000 km long trade connectivity route consisting of highways,

railways, and pipelines largely termed as BRI’s flagship project with an
immense economic potential and geo-political significance.

The CPEC, which began as a US$ 45billion project has grown to over US$62
billion, with a further increase following the signing of new agreements between
Beijing and Islamabad during Prime Minister Imran Khan’s visit to China at the
inaugural session of Winter Olympics 2022. The CPEC is an opening of
opportunities in terms of jobs, better infrastructure, foreign investment and
chances for Pakistan to be a ‘regional commercial hub’.

The trade route through the CPEC cuts down the transportation time and cost
from Chinese factories to the markets of Europe, Africa and the Middle East.

Gwadar Port serves as a hawk eye for Pakistani military forces, allowing
continuous maritime traffic surveillance. Needless to mention that the Gwadar
Port is providing China not only an alternate trade route but also expand its
sphere of influence through its strategic presence at the crossroads of Europe,
Central Asia, Middle East and Africa. The power shift in favor of China through
the CPEC and particularly the Gwadar Port has many underlying dangerous
forces and persistent tensions for Pakistan.

America has formed alliances with key regional players such as India, Japan,
Indonesia, and Singapore to prevent China from increasing its influence and
adopted a China containment policy (Einhorn and Sidhu 2017, p. 3; Hali,
2016, p. 57). Washington’s policy makers have been working on containing
China’s rise since long. The grand strategy in 21st century was designed to
safeguard American interests in the global affairs and the Pivot to Asia policy
during Obama’s regime was part of it. It was not the only policy but a prelude
to many such policies in later years that were meant to contain China.
America’s strategic alliance with India and formation of QUAD and AUKUS in
the Indo Pacific regions are the continuity of China Containment policies.