Illegal
Indian goods worth $4.2 billion are estimated to land in Pakistan annually,
stated the Sustainable Development Policy Institute (SDPI).The institute has
also identified the routes through which this smuggling takes place.

Pakistani
manufacturers said that as long as Indians had easy access to Pakistani markets
through such ‘informal trade’, Indian government would not be serious in
removing nontariff barriers.

“Informal
export from India saves the Indian government the duty drawback that it would
have to give to exporters in case of formal export, while it deprives Pakistan
of the import levies that are collected from formal import,” said Mian Anjum
Nisar, former president of Lahore Chamber of Commerce and Industry.

He
said Indian borders are not as porous as the Pakistan-Afghan border, which
substantially limit informal entry of Pakistani products in India.

He
said if informal trade is effectively checked, it would push Indians to remove
non-tariff barriers to provide a level playing field to Pakistani products so
that Indian goods could be formally exported to Pakistan.

At
a recent presentation given at a Lahore-based private university, the SDPI
identified fruits, vegetables, textiles, automobile parts, jewelry, cosmetics,
medicines, tobacco, herbal products, spices and herbs as the goods in question.

Major
routes through which these goods reach Pakistan include India to Dubai to Iran
– from Bandar Abbas to Afghanistan – and from Kandhar to Chamman and finally to
Karachi.

Another
route used is India to Afghanistan via Dubai and Iran – from Kabul to
Torkhum/Bara and then to Lahore and Rawalpindi. The third route used by
smugglers is India to Iran (Bandar Abbas) to Torkhum/Bara and then to Lahore
and Rawalpindi. The fourth route is from India to Afghanistan to Peshawar
(Afghan Transit Trade). Minor smuggling also occurs through Chakoti border and
Rohri near Bahawalpur, while some quasi formal trade is also conducted through
Dubai.

The
largest smuggling is of some Indian textile products like sarees, bridal
dresses and fancy suits. According to SDPI, the ‘informal trade’ in this sector
is worth Rs370.4 billion, or over $3.74 billion. That’s almost double than the
total formal exports of India to Pakistan.

The
SDPI researchers have found that the textile products come informally into
Pakistan from Gurdaspur through khepias (those who visit India specifically for
smuggling purpose) and frequent family travelers.

Some
goods enter the country quasi-formally through Dubai. The destination of most
of these groups is Karachi.Automobile parts worth around Rs26.8 billion
informally enter Pakistani markets, according to SDPI through
Dubai-Iran-Afghanistan-Chamman/Torhkum or via ATT or Iran-Balochistan-Karachi
route.

The
spare parts constitute 30 percent of this trade – 70 percent being of tyres.
High grade artificial jewelry worth Rs8.8 billion is brought from India by
khepias and family travelers via Dubai or ATT. The imported jewelry includes
bridal sets, bangles and lockets.

Cosmetics
worth Rs4.8 billion are smuggled into Pakistani markets through same routes and
include Godrej products, Garnier beauty creams, Liril soap etc. The informal
import of Indian medicines, according to SDPI, is worth Rs5.9 billion.

All
medicines reach Pakistan through India-Afghanistan-Peshawar route. The drugs
include Aspirin, Amoxilin, Ampicillin, Cemetidine, Lexotanil, Co- Trimaxazole,
Famotidine, Ciprofloxine, and Rentidin.

Tobacco
items – include betel leaf – which ends up in Pan mandi Lahore, Ghutka whose
final destination is Nanakwara and Kharadar in Karachi. The route is
Kerala-Mumbai-Dubai-Lahore. The monetary worth of these informal imports is
Rs4.4 billion.

The
SDPI research has also identified the primary markets of the Indian products
smuggled into Pakistan. For textiles, the primary markets are Bolton Market in
Karachi and Shahalam Market in Lahore.

For
Auto parts, the markets are Ranchor Line and Al-Noor market in Karachi, Badami
Bagh Lahore and Pirwadhai Rawalpindi. The primary markets for cosmetics and
jewelry are Bolton Market in Karachi and Anarkali in Lahore.