ANALYSIS OF PAKISTAN-INDIA BILATERAL TRADE: A TRADE INTENSITY APPROACH (EXPORTS AND IMPORTS INTENSITY INDEX)

This paper analyzes the strength and nature of bilateral trading relationship between two countries, Pakistan and India for the period from 2009 to 2018. There are several statistical indices are available to measure trade relation between two nations, but in this paper trade intensity index has been used. The result shows that the Pakistan Exports Intensity Index with respect to India has declined from 0.634 during 2009 to 0.627 during 2018, and it also has never remained stable throughout the period from 2009 to 2018 whereas, the Imports Intensity Index has increased from 1.56 during 2009 to 5.134 in the year 2018. However, it has been observed that both nations have great potential to enhance their bilateral trade, but due to some bottlenecks such as tariff and non-tariff barriers, lack of sea routes, political instability, lack of trust on each other etc., both countries, bilateral trade has affected at large. It is, therefore, recommended that both neighbor countries should increase levels of trust with each other and cooperate each other in matters, so that bilateral trade can be enhanced.