India-Pakistan trade: A case study of the pharmaceutical sector

Vaqar Ahmed and Samavia Batool
December 2014

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 qualitativ
e 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 produce
d 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 competitivenes
s 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.