How are Pakistan’s imports from India growing again despite tensions? 

Islamabad, Pakistan – In the spring of 2025, Pakistan and India severed most of their remaining links after years of acrimony.

Gunmen had killed 26 people in Pahalgam in India-administered Kashmir that April. New Delhi blamed Pakistan for the attack – Islamabad denied any role – and put the Indus Waters Treaty, governing the sharing of rivers flowing into Pakistan, in abeyance. Pakistan retaliated by closing its airspace to Indian airlines, shutting the Wagah border crossing and suspending trade.

By May, the nuclear-armed neighbours were exchanging missile and drone strikes. Four days of fighting ended in a ceasefire on May 10, for which United States President Donald Trump claimed credit.

Eighteen months later, data from Pakistan’s central bank suggested trade is gradually recovering.

Pakistan imported goods worth $61.7m from India from July to September this year, up 69 percent from the same period a year earlier, according to the State Bank of Pakistan (SBP).

Here is what the data show, what Pakistan buys from India and how the trade is continuing:

What do the latest figures show?

The SBP records payments made by Pakistani banks for imports, broken down by country. From July to September 2025, payments for Indian imports totalled $36.6m.

After the conflict, monthly payments fell from $20m in April 2025 just before the four-day war to $9.2m in June and $8.2m in July before recovering to $19.6m in September.

Over the full 2025-2026 fiscal year, which ended this June, Pakistan paid $203.8m for Indian imports, 7.6 percent less than the previous year.

Monthly averages suggest payments have largely recovered: $19.3m in the 12 months before the conflict and $19.1m in the 13 months from September 2025.

Government trade data, which break down imports by commodity, put the value of imports in the latest quarter slightly lower at $62.6m, compared with $66.6m a year earlier.

What does Pakistan import from India?

Organic chemicals and pharmaceutical products accounted for 96.2 percent of imports from India in 2025-2026, compared with 93 percent the previous year, government trade data show.

The largest category was vaccines, blood products and similar items worth $93.6m, up from $70.3m. Within this group, imports of vaccines for human use rose to $32.3m from $11.1m.

Khaqan Najeeb, a former adviser to Pakistan’s Ministry of Finance, said the reliance was driven by price and supply.

“India has developed a competitive pharmaceutical industry, particularly in active pharmaceutical ingredients (APIs), which are essential for medicine manufacturing,” he told Al Jazeera. “Pakistan’s pharmaceutical industry has historically sourced some of these inputs from India because of competitive prices, product availability and geographical proximity.”

How does trade continue during the ban?

Pakistan’s restrictions on Indian goods predate the 2025 conflict.

On August 9, 2019, days after India revoked the special autonomous status of India-administered Kashmir, Pakistan’s Ministry of Commerce banned the import of goods originating in India or shipped from the country.

Less than a month later, however, it exempted therapeutic products regulated by the Drug Regulatory Authority of Pakistan (DRAP).

After the 2025 Pahalgam attack and India’s decision to suspend the Indus Waters Treaty, Pakistan’s National Security Committee (NSC) imposed further restrictions.

“All trade with India including to and from any third country through Pakistan is suspended forthwith,” the NSC said in a statement on April 24, 2025.

But Muhammad Zubair Motiwala, a former chief executive of the Trade Development Authority of Pakistan (TDAP), a government body responsible for facilitating the country’s international trade and exports, said some Indian goods still entered Pakistan through third countries.

“Indian goods actually come through Dubai and Malaysia and others, but they are counted by country of origin,” he told Al Jazeera.

Najeeb, however, cautioned against drawing conclusions about the routes through which such goods reach Pakistan.

“Some supplies may reach Pakistan through international supply chains, but the precise routes and volumes are not publicly established,” he said.

A DRAP official speaking on condition of anonymity said that ultimately, despite the tensions with India, Pakistan’s trade decisions were determined by one factor above all: It would import from India if needed in the national interest.

Could Pakistan buy elsewhere?

Nowhere is that interest clearer than in the field of pharmaceuticals.

Overall, India accounted for only about 0.3 percent of Pakistan’s $64.5bn total import bill in 2025-2026, according to SBP data. Pakistan paid $19.5bn for imports from China, its biggest trading partner.

But the pharma sector is a different story. In 2024 before the four-day war, India was Pakistan’s second-largest supplier of pharmaceuticals, marginally behind Belgium, according to the Observatory of Economic Complexity.

Motiwala said replacing Indian suppliers could significantly increase costs for some businesses.

“We actually want this [trade] to reopen. Our raw material comes from them, and it comes from other places. It adds 40 to 50 percent to the cost if we import from other places,” he said.

Najeeb said the impact of switching suppliers would vary depending on the product.

“Freight, insurance, quality certification, regulatory approvals and delivery reliability all influence the economics. Alternative sourcing may increase costs for some products although this will vary across ingredients,” he said.

Motiwala said relations between the neighbours appeared to be easing.

“I do think the ice is melting. It seems like it. Fishermen were recently released, and there was a handshake between the two teams,” he said.

On August 29, India repatriated 25 Pakistani nationals, including fishermen, through the Wagah-Attari border crossing.

Last week, Indian and Pakistani footballers shook hands before and after India’s 3-2 win in a SAFF Championship match in Dhaka, a departure from the recent practice of teams from the two countries avoiding such gestures in other sports.

Najeeb said closer economic ties could benefit both countries.

“However, economic considerations cannot be divorced from the prevailing political and security environment. Where conditions permit, a gradual and mutually agreed resumption of trade could be examined, beginning with areas of clear economic and humanitarian benefit,” he said.