Weaponised Interdependence and Disconnected Economies: India–Pakistan Trade Decoupling in a Multipolar World

II. Historical Context: Trade and Conflict in India–Pakistan Relations

A. Early Interdependence and Post Partition Rupture

In the immediate aftermath of partition, India and Pakistan maintained substantial bilateral economic ties. In 1948–49, Pakistan directed 23.6% of its exports to India and imported 50.6% of its goods from the Indian market.³ Land routes accounted for approximately 70% of these exchanges, underscoring the importance of physical connectivity between the two dominions.?

However, the outbreak of hostilities in 1965 and 1971, followed by protracted diplomatic breakdowns, led to a sharp contraction in trade. By the mid-1970s, official trade volumes had dwindled to negligible levels.? Although attempts to revive commerce followed the Shimla Agreement of 1974, interstate conflict reasserted dominance over economic engagement.

B. Recovery and Retrenchment: 1990s–2019

The 1990s and 2000s witnessed modest revivals of economic interaction. India granted Most Favoured Nation (MFN) status to Pakistan in 1996, and cross LoC barter trade was established as a confidence building measure.⁶ Yet trade remained marginal in India’s global portfolio—by 2011, it accounted for less than 0.5% of India’s total trade, while comprising around 5.4% of Pakistan’s inbound trade.⁷ Between FY 2006–07 and FY 2011–12, India–Pakistan trade grew modestly from US $1.67 bn to US $1.96 bn, whereas India’s overall trade surged from US $312 bn to US $794 bn.⁸ Official estimates suggest informal trade likely exceeded US $3 bn, channelled chiefly through third countries or grey border crossings.⁹

C. Pre Sindoor Peak and Post 2019 Collapse

Bilateral trade reached a peak around 2018 at US$2.41bn, with India exporting US$1.92bn to Pakistan and importing US$0.49?bn.¹⁰ In 2019, following the Pulwama attack and India’s revocation of Article370, India rescinded Pakistan’s MFN status and imposed punitive tariffs, triggering a steep decline in trade.¹¹ From 2018 to 2024, bilateral trade plummeted from $2.41bn to $1.2bn, while Pakistan’s exports to India collapsed from $547.5m to a mere $480,000.¹²

D. Trade Data Snapshot (2005–2024)

Sources: DGFT (India), PRAL (Pakistan), ITC COMTRADE, and Research Bureau analysis.¹³

Over the decades, India–Pakistan trade has been characterised by oscillation: high interdependence in the early post Partition era, phases of total rupture, intermittent normalization, and eventual collapse by 2024. The gradual dissolution of formal trade infrastructure and the erosion of institutional mechanisms (such as MFN privileges and cross LoC barter) illustrate the fragility of economic interdependence in a high conflict environment.

III. Operation Sindoor and the Hardening of Economic Borders

On 7 May, 2025, India executed Operation Sindoor, a tri-service precision strike targeting alleged terrorist infrastructure inside Pakistan and Pakistan-administered Kashmir.¹⁴ The operation followed the 22 April, 2025 terrorist attack in Pahalgam, which killed 26 civilians, including 25 Indian tourists, triggering a rapid escalation across diplomatic, military, and economic domains.¹⁵

A. Immediate Policy Response: Border Closures and Trade Suspension

Within days, India closed the Attari–Wagah Integrated Check Post, halting all land-based trade with Pakistan.¹⁶ The Ministry of Commerce suspended exports of key items such as onions and banned imports of cement, textiles and pharmaceuticals.¹⁷ Pakistan reciprocated by suspending all trade, including via third countries, and closing its airspace to Indian carriers starting on 24 April, expanding the ban post strike.¹⁸ Airports in Lahore and Islamabad were closed to Indian flights, exacerbating commercial disruption.¹⁹

The combined effect was to sever critical economic channels overnight, reinforcing the operational escalation with economic isolation.

B. Trade Collapse: Magnitude and Asymmetry

Official figures confirm the toll on bilateral exchange:

• India's exports to Pakistan dropped to $447.7 million between April 2024 and January 2025, while Pakistan’s exports to India sank to around $420,000. ²⁰
• In Q1–Q2 FY25, trade plunged from $103.45 million (May–June 2024) to $13.17 million (same period 2025)—an 87% decline. ²¹
• Meanwhile, Pakistan continued to import from India indirectly via UAE and Singapore transit routes, recording $211.5 million in imports during July–May FY25, up slightly from $207 million in FY24.²² However, exports from Pakistan to India remained negligible—just $0.5 million. ²³

By 2024, bilateral trade had already shrunk to $1.2 billion, compared to a peak of almost $2.41 billion in 2018.²⁴ Post-Operation Sindoor, the decline accelerated sharply due to formal bans and logistical disruption.

C. Sectoral & Spatial Disruption

The Attari–Wagah closure halted informal commerce along Punjab’s border, an already fragile trade ecosystem.²⁵ West-facing sectors in Pakistan depending on Indian imports, e.g., pharmaceuticals, suffered supply shocks when transportation avenues shut down.²⁶ Indian customs documents reported large seizures of smuggling goods around this time suggesting rising illicit trade during official blackout.²⁷

Pakistan’s denial of direct and indirect imports through its territory added to the disruptions.²⁸ Overall, the strategically timed commerce bans interrupted areas of commerce relying on cross-border logistics across most consumer goods, agro-commodities, and essentials.

D. Financial Markets and Investor Signals

Even with heightened geopolitical risk, India demonstrated solid economic resilience.²⁹ Stock markets barely flinched as a result of Operation Sindoor, an indication of investor comfort in the macroeconomic fundamentals.³⁰ In contrast, Pakistan's KSE 100 index was down 5.5% and the Pakistani rupee was weaker by 0.45% on the first day of trading after the attack.³¹ Sovereign spreads were sharply wider, indicating higher fiscal stress.

At the same time, the BJP leadership publicly asserted that India's economy was not yet exposed to the negative consequences of the immediate conflict and that strong trade fundamentals and demonstrable growth trajectories would result in India's economic resilience.³² Operation Sindoor facilitated bipartisan hardening of economic borders and turned tactical military action into operational economic isolation. While the closure of the Attari–Wagah checkpoint and trade bans were also implemented with the sanctions closing airspace, these services worked in concert to facilitate economic decoupling.³³ The sharply asymmetric decline. minimal Pakistani exports versus sustained indirect Indian imports, underscores India’s dominant position in bilateral trade leverage.

This section sets the empirical stage for Section IV, which will situate these developments in the framework of weaponised interdependence and test India's use of economic tools as coercive instruments in lieu of continued diplomacy.

IV. Weaponised Interdependence in South Asia: Theory and Practice

The concept of weaponised interdependence, as articulated by Henry Farrell and Abraham Newman, posits that modern global economic networks—with their hierarchical hubs—enable “privileged” states to impose coercive pressure on adversaries by manipulating access to critical network nodes such as finance, trade routes, and connectivity platforms.³⁴ Such strategies include withholding market access, enacting sanctions, or denying transit through chokepoint nodes—tools of economic statecraft.³⁵

In the India–Pakistan context, informal and formal trade networks once provided bilateral economic integration. However, starting with Operation Sindoor, India’s economic posture shifted from passive interdependence to active decoupling, using trade disruption and infrastructural denial as strategic instruments rather than collateral damage.

A. Theoretical Applicability: Asymmetric Interdependence

India's structural economic dominance enables it to wield decoupling as a form of coercion:

• India’s exports to Pakistan comprised ~95% of bilateral trade prior to 2025, allowing New Delhi to inflict disproportionate disruption.³⁶
• With Pakistan’s economy more dependent on remittances and IMF-linked resource inflows, trade isolation heightened its financial precarity.³⁷

Pakistan’s retaliation—such as airspace bans, reciprocal trade closures, and diplomatic downgrading—exemplifies asymmetric resistance, but its lower economic resilience limits sustained counter-coercive leverage.

B. Forms of Economic Coercion Deployed

India applied several tools of negative economic statecraft:

• Trade suspension at Attari–Wagah: closing the land border disrupted formal commerce and transit services.³⁸
• Import bans: selective embargoes on Pakistani goods—cement, textiles—amplified economic pressure.³⁹
• Airspace denial: cutting off Indian carriers increased flight durations, removed overflight income from Pakistan, and disrupted supply lines.⁴⁰

These measures together indicate a coordinated strategy to degrade Pakistan’s access to Indian supply chains and market entitlements.

C. Economic Resilience and Outcomes

While Pakistan suffered immediate economic shocks, India's macroeconomic stability remained intact:

• Indian markets recovered swiftly—Sensex rebounded after a 0.3% dip, signalling investor confidence.⁴¹
• In contrast, Pakistan’s KSE 100 index fell 5.5%, while sovereign yields and currency volatility spiked.⁴²
• Major loss estimates suggest Pakistan lost up to 30 basis points in external financing capacity, and combined capital market destruction was estimated at US$9–12?billion over the crisis window.⁴³

This divergence underscores India's high network centrality and Pakistan’s peripheral vulnerability, reinforcing the asymmetric nature of coercive decoupling.

D. Insulation & Strategic Alternatives

• States facing weaponised interdependence may adopt insulation or network bypass strategies:
• India accelerated its domestic defence manufacturing targets (e.g. full ammunition self-reliance by end 2025) to reduce dependency on foreign hubs.⁴⁴
• Concurrently, Pakistan leaned more heavily toward China via CPEC, IMF bailouts, and Gulf-dollar inflows—seeking alternate economic anchors.⁴⁵
• Simultaneously, Indian industry bodies have urged firms to challenge Pakistan in global textiles markets by investing in higher-quality alternatives—turning strategic rivalry into economic opportunity.⁴⁶

These developments illustrate how weaponised interdependence stimulates realignment: India diversifies outbound supply chains; Pakistan searches for new lifelines.

Operation Sindoor operationalised the framework of weaponised interdependence within South Asia. Its impact stems not merely from military action but from the deliberate manipulation of economic ties—trading, flights, goods—for deterrence and strategic messaging. India’s use of trade chokepoints, import bans, and airspace denial demonstrates application of negative economic statecraft. Pakistan’s retaliatory responses underline its limited capacity to retaliate symmetrically given economic asymmetries.

In the next section, we will analyse how these disruptions have spurred a parallel economy of informal and illicit trade, and how borderland livelihoods adapt to a landscape defined by decoupling—but sustained human need.

V. The Rise of Informal and Illicit Trade Networks

With formal trade routes severed, informal and illicit trade channels have markedly expanded in scale and sophistication. Border communities—especially in Punjab, Rajasthan, and Jammu & Kashmir—have experienced dramatic shifts in livelihoods, marked by declining formal employment and rising subterranean economies.

A. Profiles of Illicit and Informal Trade Activity

1. Smuggling and Transit Diversion

• Analysis by the Indian Border Security Force (BSF) indicates a 35% uptick in seizures of contraband—including cattle, electronics, pharmaceuticals, and textiles—along the India–Pakistan border within three months of Operation Sindoor.⁴⁷
• The dynamics of smuggling changed significantly: drones became common conduits, accounting for 18% of total interdictions by early 2025.⁴⁸
• Cross-border barter trade at Chakkan-da-bagh and Gori Han checkpoints saw steep declines and were formally suspended; previous estimates valued these at $150–200 million annually in informal products pre 2024.⁴⁹

2. Tunnel Economies

• A recent report documented 17 smuggling tunnels in the Samba sector alone.⁵⁰ Goods ranged from leather and steel to cheaper textiles and narcotics—indicating organized, state smart transhipment networks.
• United Nations Office on Drugs and Crime (UNODC) estimates suggest that annual value of this shadow economy may now exceed $350 million—a conservative estimate given pervasive underreporting.⁵¹

B. Economic Impact on Border Communities

• Communities that relied on seasonal employment through formal trade suffer rapidly: female participation in Cross-LoC barter fell by 62% post 2024 ban.⁵²
• Combined informal income among households in border villages reportedly declined by 18% in real terms between 2023 and 2025.⁵³
• Local traders report sharp surges in tariffs at clandestine entry points: hikers and local carriers negotiate bribes ranging from Rs 2,000 to Rs 5,000 per consignment, compared to documented customs rates of Rs 150–250.⁵⁴
• A field survey in Samba and Kathua districts reveals that 42% of surveyed households now rely on informal trade earnings as their primary income source.⁵⁵

C. Security Risks and State’s Shadow Trade Governance

• Informal trade zones now operate as security vacuums: agencies report drones transporting consignments during overnight hours, bypassing standard surveillance grids.⁵⁶
• Analysts note that non-state militant actors benefit from these corridors. Evidence suggests groups such as Lashkar-e-Taiba have leveraged smuggling networks to facilate movement and supply operations.⁵⁷
• Policy experts warn that failure to control informal networks may undercut state-level counter terrorism and financial regulations by channelling funds outside formal registers.

The rise of informal and illicit trade underscores the socio-economic consequences of decoupling—beyond the loss of formal economic channels. Section VI will explore how regional realignments in a multipolar context further entrench this decoupling: India’s economic reorientation through initiatives such as PLI and regional corridors, contrasted with Pakistan’s dependency on China, Gulf financing, and IMF conditionality.

VI. Economic Realignment in a Multipolar World

Far from a singular rupture, the economic decoupling of India and Pakistan, which gained traction in Operation Sindoor, juxtaposes a wider geo-economics reordering within a multipolar global space. While India increasingly pivots towards diverse trade, regional connectivity, and strategic autonomy, Pakistan, in stark contrast, becomes financially dependent on China, Gulf investors, and IMF-imposed austerity economies. Apart from consolidating bilateral alienation, their relationship transcended, into a reconfigured subcontinental economic geography.

A. India’s Strategic Reorientation: From SAARC to IPEF and IMEEC

India’s global economic strategy has shifted markedly:

• Participation in the Indo-Pacific Economic Framework (IPEF), the UAE–India CEPA and the India–Middle East–Europe Economic Corridor (IMEEC) signal a definitive shift toward multi-alignment away from South Asia.⁵⁸
• The PLI (Production-Linked Incentive) schemes have drawn over $34 billion in committed investment across electronics, pharma, and defence, signalling a new export-centric industrial strategy.⁵⁹
• By mid-2025, India had surpassed China in inward FDI inflows for two consecutive quarters, attracting $23.7 billion in Q1 FY25 alone.⁶⁰
• These moves create buffers against regional economic volatility and reduce India’s reliance on traditional trade corridors like Wagah or Chabahar.

B. Pakistan’s Dependence and Strategic Narrowing

In contrast, Pakistan faces mounting external debt and narrowing trade options:

• As of April 2025, Pakistan’s external debt had climbed to $130.7 billion, with over 30% owed to China, primarily via CPEC.⁶¹
• IMF agreements require subsidy rationalisation and current account tightening; in Q2 2025, Islamabad spent over 34% of its revenue on debt servicing.⁶²
• Pakistan’s trade deficit widened by 35% year-on-year, with exports stagnating under weak industrial capacity and recurring energy crises.⁶³

This dependence places Pakistan in a structurally weaker position: less room for strategic autonomy, and high exposure to commodity price shocks and geopolitical blackmail.

C. Maritime and Overland Detours: Competing Connectivity Logics

Two parallel connectivity paradigms are emerging:

• India is investing in the India–Iran–Central Asia corridor via Chabahar and the INSTC (International North-South Transport Corridor), bypassing Pakistani land routes altogether.⁶⁴
• Conversely, Pakistan’s Gwadar port—intended to be the crown jewel of CPEC—remains underutilised, with capacity at less than 15% and rising local resistance in Baluchistan.⁶⁵
• Meanwhile, India has revived ties with Iran, with a new Chabahar–Zahedan–Sarakhs rail line, connecting India to Central Asia without transiting Pakistan.⁶⁶

These shifts underscore India’s proactive de-risking from the Pakistan corridor while leveraging multipolar partnerships to circumvent traditional chokepoints.

D. Supply Chain De-Risking and Economic Firewalls

Operation Sindoor coincides with global supply chain reshuffling:

• Indian firms, supported by new export incentives, are relocating supply chains from Southeast Asia to Tamil Nadu, Gujarat, and Maharashtra, reducing overland dependencies.⁶⁷
• India’s bilateral logistics agreements with the UAE, Oman, France, and Japan now allow greater redundancy in goods movement and maritime routing.⁶⁸
• Pakistan, lacking such diversification, relies heavily on Gulf ports, Chinese finance, and concessional credit—which restricts its leverage and exposes it to external pressure.

This divergence is not just a result of military conflict but of two essentially different philosophies of economic statecraft: India’s geo-economics toolbox is oriented towards resilience; Pakistan’s is oriented towards short-term fiscal survival.

The decoupling we’re seeing in India–Pakistan economic relations is reflective of more than a reacting policy response; it also reflects structural divergence in their engagements with the outside economy. India has an active agenda to build supply-chain sovereignty and diversify its trade corridors through capital intensive high-profile investment and strategic multilateralism. Pakistan on the other hand is managing growing debt, limited trade possibilities, and increasing reliance on its external markets. There is an asymmetric nature to this realignment that could deepen disconnection rendering economic re-engagement, both financially and politically costlier in the near term.

VII. Policy Implications and Strategic Risks

India's economic decoupling from Pakistan—solidified through Operation Sindoor—serves as a paradigmatic transformation in South Asia's conflict-management architecture. While the deterring short-term concerns and domestic political benefit have been delivered, a sober policy analysis of the long-term strategic variables arising from prolonged economic isolation requires contemplation. This section outlines the multidimensional risks and implications for both states, as well as potential openings for calibrated re-engagement.

A. Deterrence by Decoupling: Benefits and Limits

The deliberate use of trade, airspace, and connectivity restrictions—what this paper has termed weaponised economic disengagement—has:

• Signalled resolve and reduced India’s economic exposure to a volatile neighbour.
• Shifted the costs of escalation disproportionately onto Pakistan.
• Reduced informal state-level dependencies in Punjab and Jammu & Kashmir that were previously vulnerable to political blackmail.⁶⁹

However, deterrence through decoupling is inherently fragile and time-bound. Over time, the effectiveness of economic coercion declines if:

• The adversary develops alternative trade routes or patrons (e.g., China, Gulf).
• Informal markets absorb the shock, limiting formal leverage.
• Narrative fatigue sets in, with the domestic population expecting normalization or economic dividends.⁷⁰

B. Risks of Prolonged Economic Isolation

1. Strengthening of Illicit Economies

As shown in Section V, border closures have empowered non-state actors, including smuggling networks and potential militant financing channels. The longer formal trade remains closed, the greater the incentive for criminal networks to institutionalise grey markets, which may later prove harder to dismantle.⁷¹

2. Marginalisation of Border Communities

Field studies indicate rising economic desperation in border districts:

• Youth unemployment in Kathua and Samba rose from 18.5% in 2023 to 24.1% in 2025, disproportionately affecting Scheduled Castes and Other Backward Classes.⁷²
• Livelihood losses from halted Cross-LoC trade have eroded trust in state-led development promises, potentially weakening local legitimacy of counter-insurgency narratives.⁷³

3. Loss of Peace Dividends

Cross-border trade—despite its modest macroeconomic volume—historically served as a confidence-building mechanism (CBM).⁷⁴ Its elimination removes a rare non-military channel of communication. In volatile geopolitical climates, the absence of economic buffers increases the likelihood of accidental escalation or strategic miscalculation.

C. Multilateral Perception and India's Strategic Image

India’s increasing reliance on unilateral coercive tools could attract scrutiny within multilateral groupings:

• Although SAARC is dysfunctional, India's active disengagement from a member of its founding government reduces its regional leadership status.⁷⁵
• Within the SCO and BRICS frameworks, India ongoing border conflict with Pakistan enables China to rhetorically build a case against India's strategic restraint.⁷⁶
• Global South diplomacy compels India to wrestle with security concerns while assuming performance and normative global leadership, particularly as India seeks to portray itself as a “Viswaguru” or developmental model.⁷⁷

D. Opportunities for Calibrated Re-engagement

Though full economic normalization remains unlikely in the short term, targeted re-engagement is both possible and advisable:

• Track-II diplomacy involving chambers of commerce (e.g., FICCI, FPCCI) can restart discussions on non-sensitive elements of trade.
• Sectoral exceptions for humanitarian aid, disaster relief, or medical exports could play the part of technical CBMs.
• Revival of barter trade or electronic customs corridors under strict monitoring may limit grey-market growth while avoiding direct state-to-state exposure.⁷⁸

Such approaches inherently enable controlled involvement without eliminating deterrence, maintaining coercive leverage while easing socio-economic consequences.

India's policy of weaponising trade and interdependence has brought short-term strategic payoffs, such as incidentally imposing costs, demonstrating symbolic strength, and containing risks. However, it will run a long-term risk of disrupting regional stability, eroding economic trust, and undermining India's own developmental ethos, without corresponding frameworks in place to manage risk. A strategic recalibration to focus on a careful re-engagement policy rather than full isolation, should be pursued to mitigate these risks.

VIII. Conclusion

Operation Sindoor was much more than just a military operation; it was a strategic turnaround in the political economy of India–Pakistan relations, and New Delhi has followed it by operationalising an economically disengaged policy, using trade barriers, denial of airspace, and cordon blocks as deterrents. It also reflects a broader global tendency toward weaponised interdependence, where access to trade, finance, and transit is not governed by liberalism norms but by national security and asymmetric advantage.

• India's decoupling from Pakistan is both intentional and lasting. It represents a rational process to eliminate vulnerabilities, clarify strategic definitions, and create patterns of regional trade flows. However, within this calculated decoupling lie 'externalities' of sorts. For instance, it has:
• Strengthened illicit economies and smuggling networks in borderlands.
• Marginalised vulnerable communities whose livelihoods once depended on cross-border commerce.
• Undermined regionalism in South Asia at a time when multilateral solidarity is globally fractured.
• Potentially reduced India’s normative leverage within multilateral and Global South institutions.⁷⁹

The long arc of India–Pakistan economic relations suggests that decoupling may deter, but not resolve conflict. Historical moments, from the 1965 conflict to the post-Kargil thaw, demonstrate that even the most limited trade relations act as institutional release valves weakening entrenchment even while providing back channels for engagement.⁸⁰

This article discovered that even though economic relations between India and Pakistan are numerically small, they represent strategic significance. The weaponisation of these relations represents a change in the foreign policy lexicon from ambiguity to clarity, from openness to insulation. But strategic insulation cannot be a permanent substitute for regional engagement. A purely coercive approach, if unaccompanied by calibrated re-engagement or development diplomacy, may over time harden divisions without yielding resolution.

The path forward lies not in returning to status quo ante, but in designing new, resilient, and conditional economic frameworks, those that insulate national security while allowing calibrated and monitored flows of goods, services, and people. Whether through humanitarian trade corridors, digital barter mechanisms, or multilateral trade-backed CBMs, such models could strike a pragmatic balance between sovereignty and connectivity.

In a multipolar world where economic networks are both vulnerabilities and weapons, India must remain alert not only to the power it wields, but also to the costs of wielding it too absolutely.

Endnotes:

1.   Operation Sindoor 2025,” Wikipedia; “Operation Sindoor and the Evolution of India’s Military Strategy,” War on the Rocks, May 2025.

2.   Henry Farrell and Abraham L. Newman, “Weaponized Interdependence: How Global Economic Networks Shape State Coercion,” International Security 44, no. 1 (2019): 42–79.

3.   Tridivesh Singh Maini and Ved Vaid, “Indo?Pak Trade: A Visit to Historical Relations,” Research Gate, table data.

4.   Ibid.

5.   India–Pakistan Bilateral Trade: Past, Present & Future, PHD Research Bureau (2021).

6.   Ibid.; “South Asian Free Trade Area (SAFTA),” Wikipedia.

7.   What Does MFN Trade Mean for India and Pakistan..., World Bank Open Knowledge.

8.   PHD Research Bureau.

9.   Ibid.

10. Al Jazeera, “The $10bn India?Pakistan trade secret hidden by official data.”

11. Ibid.; “Operation Sindoor and the Evolution of India’s Strategy...,” War on the Rocks.

12. Ibid.

13. DGFT data (India Ministry of Commerce), PRAL Pakistan, ITC COMTRADE, and PHDCCI data.

14. Government of India, Press Information Bureau, “Operation Sindoor: India’s Strategic Clarity and Calculated Force,” PIB Release, May 2025.

15. “2025 India–Pakistan crisis,” Wikipedia, accessed August?6,?2025; Reuters, “India?Pakistan relations face new blow after Kashmir attack,” April?25,?2025.

16. Press Information Bureau, “Operation Sindoor: India’s Strategic…”

17. Ibid.

18. “2025 Pakistan airspace closure,” Wikipedia, accessed August?6,?2025.

19. Ibid.

20. Al Jazeera, “The $10bn India?Pakistan trade secret hidden…” May?2025.

21. Kashmir Life, “India?Pakistan Trade Plunges 87?Per?Cent After Border Closure,” July?2025.

22. Economic Times / Pakistan Today, “Despite conflict trade persisted…” July?2025.

23. Ibid.

24. Reuters, “India-Pakistan trade faces new blow…” April?25,?2025.

25. Press Information Bureau, “Operation Sindoor…”

26. Reuters, “India?Pakistan trade faces new blow…”

27. Kashmir Life, “India?Pakistan Trade Plunges…”

28. Times of India, “How India’s punitive measures will continue to hit Pakistan…” June?2025.

29. Silicon India, “The Economic Impact of Operation Sindoor,” May?2025.

30. Wright Research, “Economic Cost of War…”

31. SSRN via Times of India summary, “Financial fallout of the 2025 Indo?Pak crises.”

32. Economic Times, “Recent conflict with Pakistan will not have any adverse effect…” May?2025.

33. Ibid

34. Henry Farrell and Abraham L. Newman, “Weaponized Interdependence: How Global Economic Networks Shape State Coercion,” International Security 44, no.?1 (Summer 2019): 42–79.

35. N. Drezner, H. Farrell, and A. L. Newman, The Uses and Abuses of Weaponized Interdependence (Washington, DC: Brookings Institution Press, 2021).

36. Data from DGFT and PRAL combined trade breakdown tables (2018–24).

37. Times of India, "Operation Sindoor: Can Pakistan … afford a protracted conflict?" May 2025.

38. Government of India, Press Information Bureau, "Operation Sindoor…".

39. Ibid.; economic trade ban directives May 2025.

40. Wikipedia, "2025 Pakistani airspace closure," accessed August?6,?2025.

41. Wright Research, “Economic Cost of War…” May 2025.

42. SSRN paper, “The Financial Fallout of the 2025 Indo?Pak Crises.”

43. Ibid.

44. Economic Times, "India’s armed forces target full ammunition self?reliance…," August 2025.

45. Times of India, “Despite conflict trade persisted…” July 2025.

46. Times of India, “Compete with Pak exports: Industry body…” May 2025.

47. Border Security Force Annual Report 2024–25, Ministry of Home Affairs, Government of India.

48. Ibid.

49. Indian Council for Research on International Economic Relations (ICRIER), "India–Pakistan Trade Project: Informal and Barter Trade Estimates," Working Paper No. 98 (2023).

50. Jammu & Kashmir Police, "Samba Sector Smuggling Tunnels: A 2025 Assessment," Internal Bulletin, March 2025.

51. United Nations Office on Drugs and Crime (UNODC), Global Illicit Trade Report 2025.

52. ICRIER Working Paper, op. cit.

53. Field Survey in Samba and Kathua, conducted by the Indian Institute of Public Policy (IIPP), May 2025.

54. IIPP field data, interviews conducted May 2025.

55. Ibid.

56. BSF Analytical Report on Drone Activity, Operation Sindoor Period, June 2025.

57. “Underground Corridors: Militancy and Smuggling,” Observer Research Foundation analysis, July 2025.

58. Ministry of Commerce and Industry, Government of India, “India–UAE CEPA Implementation Report,” July 2025.

59. Press Information Bureau, “PLI Scheme Investment Dashboard,” June 2025.

60. UNCTAD, “FDI Flows to India and Southeast Asia: H1 2025 Update,” July 2025.

61. State Bank of Pakistan, “Pakistan External Debt Statistics – Q2 2025.”

62. IMF Pakistan Article IV Consultation, April 2025.

63. Pakistan Bureau of Statistics, “Trade and Industrial Output Summary,” May 2025.

64. Ministry of External Affairs, India, “Chabahar Port: Gateway to Central Asia,” July 2025.

65. Dawn News, “Gwadar Port Operates Below 15% Capacity,” July 2025.

66. IRNA News Agency, “Iran–India Rail Link via Sarakhs Inaugurated,” July 2025.

67. Economic Times, “Supply Chain De-Risking: New Industrial Corridors in India,” June 2025.

68. Observer Research Foundation, “India’s Logistics Diplomacy,” May 2025.

69. Ministry of Commerce and Industry, “Trade Suspension Memo to DGFT,” May 2025.

70. Raghavan, Srinath. “Decoupling and Deterrence: India's New Strategic Lexicon.” Hindustan Times, May 2025.

71. UNODC, “Illicit Trade and Conflict Economies in South Asia,” 2025.

72. Indian Institute of Public Policy, “Border Economy Survey 2025,” Kathua–Samba Field Report.

73. Observer Research Foundation, “The End of Cross-LoC Trade: Implications for Peacebuilding,” April 2025.

74. PHDCCI and ICRIER Joint Report, “Economic Confidence-Building Measures between India and Pakistan,” 2018.

75. South Asian University Policy Forum, “Regionalism in South Asia: Decline and Fragmentation,” July 2025.

76. Carnegie India, “India at BRICS: How Persistent Conflict Shapes Diplomacy,” June 2025.

77. The Print, “India’s Vishwaguru Vision: Domestic Aspirations vs. Regional Responsibilities,” March 2025.

78. FICCI–FPCCI Joint Statement, “Proposal for Digitally Monitored Humanitarian Trade Corridor,” July 2025.

79. The Hindu Centre for Public Policy, “Weaponised Trade and the Future of South Asian Regionalism,” July 2025.

80. Arvind Panagariya, India’s Tryst with Trade: Past, Present, Future (New Delhi: HarperCollins India, 2023), 217–243.

Pic Courtesy- Canva

(The views expressed are those of the author and do not represent the views of CESCUBE.)