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On paper, trade between India and Pakistan is dead. The land border is shut, direct commerce is banned, and Islamabad itself suspended all trade, including goods routed through third countries. Yet the latest official figures tell a very different story: Pakistan's imports from India did not just continue — they surged by 69%.
According to data from the State Bank of Pakistan, reported by Dawn, Pakistan imported goods worth $61.74 million from India in the first quarter of the 2026-27 fiscal year, up from $36.55 million in the same period a year earlier. In the same quarter, Pakistan recorded no exports to India at all. The one-way flow raises an obvious question: if the border is closed and trade is banned, how are Indian goods still reaching Islamabad?
The numbers behind the 69% jump
The headline figure is striking because it runs against every policy signal of the last eighteen months. After the Pahalgam terror attack in April 2025, in which 26 people were killed, India closed the Wagah-Attari crossing — the only land route permitted for bilateral trade — and prohibited the direct or indirect import and transit of goods originating in or exported from Pakistan. On May 4, 2025, Pakistan announced a suspension of all trade with India, including trade routed through third countries.
Despite all of that, the flow of goods did not stop. It grew. Pharmaceuticals and pharmaceutical raw materials are among the most important categories, alongside plastics, petroleum products, dyes, organic chemicals, rubber, coffee, tea, vegetables, spices, dairy products and cereals. A Reuters report put India's pharmaceutical exports to Pakistan at $208 million as of March 2025 — a reminder that, for all the political hostility, Pakistan's health system has long depended on Indian-made medicines and inputs.
How goods travel when the border is closed
Trade experts say the answer lies in what the Global Trade Research Initiative (GTRI) calls a "grey-zone" strategy. Instead of crossing the Wagah-Attari border, Indian goods are shipped to neutral transit hubs — most commonly the United Arab Emirates, Singapore and Sri Lanka. There, shipments may sit in bonded warehouses, where documents and labels are changed, before being re-exported to Pakistan under a new stated country of origin.
For the Indian exporter, the first leg of the journey is an ordinary, legal international transaction. The complexity arises only after the goods leave the hub, when intermediaries re-route them onward to Pakistan. GTRI has estimated that unofficial Indian exports to Pakistan could amount to as much as $10 billion a year — far above the official figures, and a measure of how large the shadow channel may be.
That estimate should be handled with care. It is an analyst's estimate, not an official statistic, and the State Bank of Pakistan figures on their own do not establish which routes any particular shipment took, or prove that any specific restriction was violated. What the data does prove is demand: Pakistani buyers are still sourcing Indian goods at scale, and someone is finding a way to deliver them.
Why the demand does not go away
The persistence of the trade says something important about how sanctions and bans actually work. Pakistan relies on Indian manufacturing for essential, life-saving drugs and industrial inputs that its domestic production cannot easily replace. When a ban removes the legal route but not the need, the trade does not disappear — it moves into the shadows, gets more expensive, and becomes harder to track.
The same pattern shows up wherever trade bans meet deep economic interdependence. Official bilateral trade collapses to near zero, while indirect flows through third countries quietly carry much of the old volume. The goods get relabelled, the prices rise to cover the extra legs of the journey, and both governments lose the visibility — and the leverage — that formal trade once gave them.
What the data does not prove
It is worth being precise about what is known and what is not. The 69% jump is documented in Pakistan's own central-bank data. The third-country routing is the explanation offered by trade experts and think tanks, not something the import figures themselves demonstrate. And the $10 billion unofficial-trade estimate is a ceiling sketched by one research group, not a confirmed total.
Still, the direction of travel is clear. A trade ban announced with great political fanfare has not ended India-Pakistan commerce; it has rerouted it through Dubai, Singapore and Colombo, added middlemen at every step, and left both countries with less control over a flow they officially claim does not exist. Until either the politics change or the underlying demand is met elsewhere, the grey route will keep doing what the closed border cannot: delivering the goods.
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Sources: Firstpost, citing Dawn and State Bank of Pakistan data · OdishaBytes on the grey route