India and Pakistan are planning to open a new land corridor across the two Punjab regions, to enable more trade between them to take place.
Trade between India and Pakistan transits currently only through the Attari-Wagah border connecting Punjab on both sides. The two nations are in advanced talks to open Munabao in Rajasthan, India, and Khokharapar in Sindh, Pakistan.
There is a railway line connecting the two towns, but until 2006, it had not been used since the 1965 war between the two nations. There is now a once a week service.
Commerce ministry officials confide that the two countries are exploring the option of facilitating trade between India and Pakistan via a third route, connecting Hussainiwala and Ganda Singh Wala on either side, to help a larger number of traders in either country.
"However, it will be taken up after the Khokharapar-Munabao route is cleared and would require cabinet approval, besides clearance from home ministry. The idea is to open up as many trade corridors as possible, especially restoring the traditional routes," the officials reported.
One of the reason trade is being made easier is that the import restrictions simply are not working. The products people want are smuggled across the border regardless and prices are then inflated.
Bilateral trade between the two countries stood at $2.7 billion in 2010-11 with exports from India at $2.3 billion, while imports from Pakistan at nearly $400 million. Major exports from India include a range of vegetables.