After the unceremonious ouster of Imran Khan from the seat of government in Pakistan and the promulgation of Shehbaz Sharif as Prime Minister, there have been signs of a thaw in India-Pakistan relations. It was reported that the Pakistan Army chief, General Qamar Bajwa, had countenanced backchannel talks and a “limited trade resumption package” with India. This was to help alleviate some of the stresses on Pakistan’s flailing and cash-strapped domestic economy that was veering on the edge of a default in the face of a widening current account deficit and high inflation brought on by the after-effects of a global novel coronavirus pandemic, unprecedented floods, and decades of poor planning.
As a respite, the International Monetary Fund (IMF) recently agreed to a one-year extension for Pakistan’s 39-month, $6 billion Extended Fund Facility programme begun in 2019, and further added an additional $1.17 billion to its coffers. To ease its situation further, especially considering the devastating impact of the floods on food supply in Pakistan, Pakistan’s Finance Minister Miftah Ismail had indicated his openness to import “vegetables and edible items from India”. However, Mr. Sharif had to quickly retract Mr. Ismail’s suggestion and restate his government’s commitment to prioritising a resolution of the Kashmir dispute before normalisation of bilateral relations could take place. There has been no official confirmation of India’s proposal to provide food aid to Pakistan, nor of any Pakistani request for the same.
