A reported $40 billion economic loss since Pakistan’s trade with India was suspended in 2019 has prompted Pakistani business representatives to seek the restoration of commercial ties, bringing the hidden cost of politically disrupted supply chains into sharper focus. The estimate, cited by Aaj Tak Business from a Pakistan business advocacy group, covers the period after the Pulwama terror attack and the subsequent deterioration in relations between the two countries.
The appeal is significant not only because it concerns bilateral trade. It also shows how the geography of supply chains can shape the cost of medicines, textiles, fuel, agricultural inputs, construction materials and industrial equipment. According to the report, Pakistan’s business community says that goods once available from a nearby supplier are now being sourced from more distant markets, increasing freight expenses, extending delivery times and placing additional pressure on domestic manufacturers.
The Pakistan Business Council has called for broad economic cooperation with India. Its chairman, Noor Muhammad Kasuri, said the prolonged interruption had forced Pakistani businesses to buy essential raw materials and industrial products from countries farther away. The report attributes the demand for renewed trade to rising import costs and growing pressure on domestic industries.
The reported $40 billion figure is an estimate cited from a business advocacy group, not an independently verified government accounting of Pakistan’s total loss. That distinction matters because the number combines the wider economic effect of the trade interruption with sector-specific costs identified by industry representatives. The report does not provide a methodology, official trade series or government assessment explaining how the total was calculated.
Even with that limitation, the sectoral examples point to a clear supply-chain problem. Pakistan’s pharmaceutical industry is reported to be seeking access to Indian raw materials, with Kasuri saying that restored imports could reduce production costs and improve supply-chain efficiency. The report says the pharmaceutical sector could save $3 billion annually through trade with India, although it does not provide a detailed calculation behind that estimate.
The pharmaceutical example illustrates why proximity matters in industrial trade. When manufacturers depend on inputs from distant suppliers, the cost is not limited to the price paid at the factory gate. Freight, delivery time and the management of longer supply routes can all affect production. For businesses operating with limited room to absorb higher costs, delays in obtaining raw materials can also put pressure on output and inventory planning. These mechanisms are described in the report through the statements of Pakistan’s business representatives; the supplied material does not establish the scale of any resulting shortages or production cuts.
Textiles provide a second example. Pakistan’s textile industry has faced greater import dependence amid a decline in domestic cotton production, according to the report. Kasuri estimated that textile producers had incurred an additional $5 billion by importing cotton from Brazil, Egypt, China and the United States. As with the wider $40 billion estimate, this is an industry estimate cited by the report and is not accompanied by an independently published calculation in the supplied material.
The textile case also reveals the difference between production capacity and supply resilience. A country may retain factories, workers and export markets, yet still face higher costs if a critical raw material must travel farther. The disruption is therefore not simply a question of whether a product can be found elsewhere. It is a question of how much additional transport, time and financial exposure is built into the replacement route.
The reported effects extend beyond pharmaceuticals and textiles. Pakistan is said to be importing sugar, fertiliser, cement, petroleum products, iron and steel, vegetables and heavy machinery from distant markets despite India’s production capacity in several of these categories. These products are directly connected to the functioning of cities and industrial regions. Cement and steel are basic construction inputs; fuel supports transport and logistics; fertiliser affects agricultural production; and heavy machinery supports industrial activity.
Kasuri argued that India’s geographical proximity could make it a cheaper supplier for products with high transportation costs. The report specifically cites petroleum as an example, saying that Indian refineries are closer to Pakistan than several existing international suppliers. In that account, the benefit of proximity would be faster and potentially less expensive delivery. The material supplied does not establish whether such trade routes are currently feasible under existing restrictions, or what legal and administrative steps would be required to restore them.
This is the central institutional issue raised by the report: supply-chain costs are shaped not only by market prices but also by diplomatic decisions, customs access and the availability of commercial corridors. When trade is suspended, companies may redirect purchases to countries that are farther away. That can preserve access to goods while making the overall system more expensive and slower. The result is a form of economic friction that is distributed across manufacturers, importers and, potentially, downstream consumers.
For urban economies, the effect can appear indirectly. Higher costs for steel, cement, fuel and machinery can increase the cost base for construction and industrial services, while costlier pharmaceuticals affect an essential consumer sector. The report does not quantify any impact on Pakistani housing, infrastructure projects, retail prices or household expenditure. It does, however, identify the industrial inputs through which a trade disruption can move into the wider built environment and urban economy.
The demand for renewed commercial relations also reflects a tension between political risk and economic efficiency. India and Pakistan’s trade relationship was disrupted after the Pulwama attack and the escalation of tensions that followed. The business council’s appeal does not resolve the political or security questions behind that disruption. It shows instead that industry representatives are evaluating the economic consequences of prolonged separation from a geographically close market.
The supplied report provides no indication that the Pakistani government has accepted the council’s demand, nor does it announce a formal timetable for restarting trade. It also does not provide a response from Indian authorities. That leaves the proposed reopening at the level of a business-sector appeal rather than a confirmed policy change.
The evidence therefore supports two conclusions, with different levels of certainty. The first is that Pakistani business representatives believe the interruption has increased import costs and weakened supply-chain efficiency across several sectors. The second is that the precise $40 billion aggregate loss, the $3 billion pharmaceutical saving and the $5 billion textile burden remain attributed estimates whose methodology is not provided in the supplied material.
What deserves monitoring is whether the appeal moves into an official policy process, whether either government issues a statement on commercial ties, and whether sector-specific trade data is published to test the estimates. Until then, the report’s strongest signal is not a confirmed reopening of Pakistan-India trade, but a public acknowledgment from industry representatives that geographic proximity has an economic value which prolonged political restrictions can erase.
