India-Pakistan Trade: An Analysis of the Pharmaceutical Sector

This paper attempts to evaluate the possible gains and losses arising from the gradual opening up of pharmaceutical trade between India and Pakistan. We explain the comparative advantages of both countries at a disaggregated level, followed by a qualitative analysis of various perceptions and experiences of Pakistan’s pharmaceutical manufacturers with respect to trade with India. We find that a gradual opening up of pharmaceutical trade with India may allow
Pakistan to enhance the quality of locally produced medicines through raw material, intermediate inputs, knowledge, and skills transfer from India. Pakistan, in the medium to long run, may also be able to diversify its pharmaceutical export base, reduce cost of production and achieve higher competitiveness through the development of value chain linkages with India. Such linkages are important to cater to the projected rise in demand for pharmaceuticals in
Pakistan, Afghanistan and abroad.