The closure of the Attari-Wagah border has severely impacted India-Pakistan trade, which is worth around ₹3,800 crore annually. This disruption has hit Punjab particularly hard, as the state relies heavily on the border for trade and economic activity.
The Importance of the Attari Border
The Attari Integrated Check Post (ICP) has long been a crucial trading point between India and Pakistan, facilitating the exchange of goods like cement, dry fruits, and fertilizers. Before relations soured between the two countries in 2019, trade volumes were robust, peaking at ₹4,371 crore in the 2018-19 fiscal year. However, after Pakistan’s withdrawal of its Most Favored Nation (MFN) status, trade has been on a steady decline. Today, India-Pakistan trade has dwindled to approximately ₹1,290 crore, mostly limited to Afghan imports.
Punjab’s Economic Strain
Punjab’s economy is feeling the brunt of the border shutdown more than any other state. Cities like Amritsar, located near the border, have seen a sharp decline in business. The Majith Mandi wholesale market for dry fruits, for example, has seen price hikes, particularly for dry dates, due to a disrupted supply chain. Traders and consumers are both affected by these rising prices.
The customs clearance sector, too, is facing a significant loss of business. Several customs agents report a 50% drop in their clientele. Truckers who once operated across the border have also seen their livelihood take a hit. The Attari Truck Union, once home to 500 active members, now has fewer than 210 truckers left, and many truck owners have had to sell their vehicles or surrender them to banks due to mounting debts.
These economic challenges are contributing to widespread job losses, pushing many families into financial difficulty.
Broader Consequences
The border closure goes beyond just trade losses—it is also tied to growing geopolitical tensions between India and Pakistan. Pakistan has suspended several bilateral agreements, including the 1972 Simla Agreement, in retaliation for India’s actions in Kashmir. This has further complicated diplomatic relations and regional stability.
Additionally, the suspension of trade has disrupted the movement of goods coming from Afghanistan. Much of this trade passes through Pakistan, and now, with trade links severed, goods worth approximately $640 million annually are unable to reach their destinations.
What Lies Ahead?
Although the current closure presents significant challenges for those dependent on border trade, it also highlights the need for alternative trade routes and greater economic diversification. To counterbalance the effects of these disruptions, Punjab could look into improving infrastructure and expanding trade with other neighboring countries. In the meantime, the focus for the state is to address the immediate hardships faced by border communities and work towards resuming cross-border trade.
