Pakistan Admits $40 Billion Loss After Pulwama Attack Trade Freeze

Pakistan has acknowledged that its decision to suspend trade with India following the Pulwama Attack in 2019 has inflicted an estimated $40 billion in economic losses on its already struggling economy. The staggering figure was disclosed by Noor Muhammad Qasuri, chairman of the Pak-India Business Council (PIBC), who has called for the restoration of commercial relations between the neighbouring countries, citing the mounting financial burden on Pakistani businesses.

According to a Press Trust of India (PTI) report published on November 2, 2026, Qasuri said that the prolonged suspension of bilateral trade had significantly increased Pakistan’s import costs, disrupted supply chains and deprived domestic industries of access to more affordable Indian products. His remarks represent a significant acknowledgement from Pakistan’s business community that the decision to sever commercial connections has carried consequences far beyond the immediate diplomatic and political fallout.

The trade restrictions followed the February 14, 2019, terrorist attack in Pulwama, Jammu and Kashmir, in which 40 Central Reserve Police Force (CRPF) personnel were killed when a suicide bomber targeted a convoy of security personnel. The attack, claimed by Pakistan-based terror organisation Jaish-e-Mohammed, triggered widespread outrage across India and led to a series of diplomatic and economic measures against Pakistan.

In the aftermath of the Pulwama Attack, India withdrew Pakistan’s Most Favoured Nation (MFN) status and imposed a 200 per cent customs duty on Pakistani goods. Pakistan subsequently suspended bilateral trade with India in August 2019, following India’s decision to revoke Jammu and Kashmir’s special constitutional status. What began as a political and diplomatic confrontation gradually developed into a prolonged economic separation.

Qasuri’s latest assessment suggests that the costs of this separation have been particularly damaging for Pakistan’s manufacturing and pharmaceutical sectors. Businesses that previously relied on comparatively inexpensive Indian raw materials have been compelled to seek alternatives from more distant international markets. This has increased transportation expenses, freight charges and delivery times, putting additional pressure on companies already operating in a difficult economic environment.

The pharmaceutical industry is among the sectors that could benefit considerably from the restoration of trade. According to Qasuri, importing raw materials from India could save Pakistan between $2 billion and $3 billion annually. Indian pharmaceutical ingredients and other essential supplies could provide Pakistani manufacturers with a geographically closer and potentially more economical source of procurement.

The textile sector has also experienced substantial financial difficulties. Qasuri pointed out that declining domestic cotton production forced Pakistani mills to procure cotton from countries including Brazil, Egypt, China and the United States. These alternative supply arrangements reportedly generated approximately $5 billion in additional expenses for the industry. The experience demonstrates how restrictions on neighbouring markets can create expensive supply-chain complications for domestic manufacturers.

The Pulwama Attack and the subsequent deterioration of bilateral relations therefore continue to have an economic dimension that Pakistan’s business representatives are increasingly highlighting. Qasuri argued that restoring trade would reduce transportation costs, improve the availability of essential commodities and create fresh opportunities for investment, tourism and regional cooperation.

He also highlighted the potential advantages of importing petroleum products from India. Given the geographical proximity of Indian oil refineries, Pakistani businesses could potentially benefit from shorter transportation routes, reduced freight expenses and faster deliveries. Access to Indian agricultural and industrial products could similarly help reduce production costs across multiple sectors.

The latest $40 billion estimate marks a considerable increase from the assessment Qasuri presented in March 2025, when he estimated Pakistan’s cumulative losses at approximately $30 billion over six years. At that time, he had also suggested that bilateral trade between the two countries could potentially reach $20 billion to $25 billion annually if commercial relations were restored.

The economic imbalance between the neighbours makes the issue particularly significant. India has an economy worth approximately $4 trillion, while Pakistan’s economy is valued at around $350 billion. Access to the Indian market could therefore offer considerable commercial opportunities to Pakistani businesses, particularly those struggling with high import costs and limited access to affordable supplies.

The Pulwama Attack remains a defining moment in India’s national security and diplomatic history. The suspension of trade was part of the broader response to terrorism and the deteriorating relationship between the two countries. Any discussion about restoring economic ties must consequently be considered against the continuing security concerns that shaped the original decision.

The Pulwama Attack also demonstrated that cross-border terrorism carries consequences extending beyond the immediate loss of human lives. Pakistan’s business community is now confronting another dimension of that prolonged confrontation: the financial cost of remaining economically disconnected from one of the region’s largest markets.

Ultimately, the Pulwama Attack and its aftermath have left a complicated legacy for South Asia. While Pakistani business leaders are increasingly advocating commercial engagement, the restoration of trade cannot be viewed merely as an economic calculation. Security, accountability and the prevention of terrorism remain central considerations for India, even as Pakistan acknowledges the considerable price its economy has paid for the prolonged trade suspension.