KARACHI: Increasing tension between Pakistan and India has not hurt trading of the Indian rupee as it is easily available in the open market.

Talking to Dawn on Friday, a number of exchange companies said trading of the Indian rupee is normal and without any shortage or notable change in its rate although the number of currency deals is thin. “The exchange rate of the Pakistani rupee versus the Indian rupee is almost stable despite rising tension between the two countries,” said Anwar Jamal, a currency dealer in the open market.

The currency dealers said the Indian currency is mostly traded by people who frequently travel to India and bring goods to sell in the local market. These goods carriers are considered smugglers or khapias.

This shows that smuggling continues and most goods are coming through the border despite mounting tension. It also indicates war hysteria whipped up by the Indian government and media has not yet trickled down to goods carriers who are still operating across the border.

“The Indian currency has greater demand in Lahore and the market is also bigger for the Indian rupee compared to Karachi,” said Malik Bostan, president of the Exchange Companies Association.

The PML-N government has been trying to ease the cross-border tension and develop better trade relations with India. But the recent uprising in Indian-held Kashmir and high-handed tactics of the Indian forces hurt the prospects of good trade relations.

One Indian rupee is available at Rs1.55 in the open market. However, the dealers said trading is thin since travelling to India has drastically declined.

They said exchange companies have small volumes of the Indian rupee. “If you want to get 100,000 rupees or more, you will have to book it in the morning to get it in the evening. The exchange companies pool their holdings,” said Mr Jamal.

The currency dealers said the demand for the Indian rupee has dried up in Karachi, as people from the city are not travelling to India. This is despite the fact that a large number of Karachi residents have close relatives in India who they would often visit in the past.

The value of Pakistan’s exports to India was $425 million while imports from India amounted to over $1.4 billion during 2015-16. This shows the balance of trade is in favour of India.

The new fiscal year began with lower exports to, and higher imports from, India. According to the latest available data, Pakistan’s exports to India in July fell to $38.8m, down 8.9 per cent from $42.6m during the same month of the last fiscal year. However, the decline was greater compared to June, as exports in the preceding month amounted to $47m.

Imports amounted to $88.9m in July compared to $87.7m in the same month of 2015-16. June imports were $113.9m.

India also earns millions of dollars every year through exports of films that are shown in Pakistani cinemas. The government has not banned Indian films so far despite serious allegations being levelled by the Indian government against Pakistan.

Published in Dawn September 24th, 2016