Pakistan's economy at partition was based on agriculture and textiles with little infrastructure or industry. It inherited few skilled traders after mass migration of Hindus and Sikhs who previously dominated trade. International trade was crucial as 90% of exports were raw materials while imports consisted of manufactured goods to fill the industrial gap. India was Pakistan's largest trading partner initially, but trade broke down after each imposed duties on the other's exports. Wealthy families emerged to power the nascent economy and trade remained a key sector with potential for large profits.

1. Sehrish Asghar, Rana Aqeel, Waqas Khalique,
M Umer Toor, Hassan Mohi-ud-Din

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3.  At partition economy of Pakistan was semi-
industrialised one, based heavily on textiles,
agriculture and food production.
 Pakistan inherited little infrastructure & almost no
industrial set-up.
(Source: Zaidi, S. Akbar, Issues in Pakistan Economy, 2nd ed.)
 Muslim traders supported the idea of Pakistan & financed
Muslim League, e.g., Memons, Khwajas, etc
 “[Creation of Pakistan] was like gold rush of United
States [for Muslim businessmen]," G. M. Adamjee

4.  Mass migration of Hindus and Sikhs, who
controlled trade & industry, “nearly
paralyzed the economic & administrative
machinery of Pakistan”
(Economy of Pakistan 1947-68, (1968). Ministry of Finance, Government of
Pakistan, p. 7 & 102)
 Migration: Pakistan “exported” expert &
wealthy Hindus & Sikhs to India, and
“imported” rural farmers & craftsmen, mostly
(Butt, M. Shoaib, & Bandar, Jayatilleke S., Trade liberalization and regional
disparity in Pakistan, (2009) Taylor & Francis, p. 13)

8.  Several entrepreneurs who came to be
dubbed as 22 families in the 1970s
apparently had considerable economic
power at the time Pakistan was born,
like, Habibs, Saigols, etc.
 17 of 100 people at the top industry in
1950-60s had industries in 1947
(Source: http://richpaki.tripod.com/saga.htm)

9.  East Pakistan’s economy was growing at a faster rate than the
economy of West Pakistan = Exports from East Pakistan to West
Pakistan faster
 The bulk of this trade was carried by sea, a small volume by air
 West Pakistan’s imports from East Pakistan mainly consist of betel-
nuts, spices, wood timber, fruits, vegetables, tea, jute manufactures,
paper, paste board, matches and leather
 Imports into East Pakistan from West Pakistan were rice, wheat, raw
cotton, oil-seeds, tobacco, machinery, cotton yarn, cotton fabrics,
drugs, medicines, oils, metal manufacture
(Source: Twenty Years of Pakistan 1947-1967 by Altaf Gauhar p297 & Economy of Pakistan
(1947-68), Ministry of Finance)
 Trade was carried through land via through Calcutta; data not
available, according to Ministry of Finance’s report Economy of
Pakistan 1947-68

10. Region Trade Amount (Rs. crore)
East to West 1.98
West to East 14.03
Total 16.01
Source: Economy of Pakistan 1947-68, (1968). Ministry of Finance, Government of
Pakistan

11.  Pakistan had only two ports: Karachi port had 17 berths (related to
docks), 13 of which 60 years old; Chittagong, handling capacity of
0.5 million tons. Foreign trade through Calcutta unrecorded
(Economy of Pakistan 1947-68, (1968). Ministry of Finance, Government of Pakistan, p. 98)
 Pakistan Merchant Navy had only 4 old ships of 27,347 “dead
weight” tonnage (weight a ship safely carries)
(Planning and development in Pakistan by M.L. Qureshi pg 77)

12.  On independence Pakistan found her foreign trade
circumscribed in two ways:
1) Bulk of trade with India. With no industries and known
mineral resources coming to her share, imported many
items, & exported jute & cotton to India
2) Exports: entirely comprised raw materials - jute and
cotton; 75% of the total world production of jute in
Pakistan at Partition
 Foreign trade closely linked with India & United
Kingdom: exported foodstuffs & primary commodities &
imported manufactured goods
(Source: Gauhar, Altaf, Twenty Years of Pakistan 1947-1967,p. 259
& p. 262)

13. “Percentage Distribution of Country-Wise Table on Principal Exports: 90% raw materials
Exports in 1948-49”
Commodity 1948 (in crore
Country % Share
rupees)
Raw Jute 119.25
India 55.8
United Kingdom 10.9 Raw Cotton 36.47
United States 8.9
Raw Wool 3.09
Belgium, France, 10.4
Italy, West Hides & Skins 4.85
Germany
Black Tea & Other 4.24 + 19.14
Japan, China, Hong 3.9 exports
Kong
Total 187.04
Other countries 10.1
Economy of Pakistan 1947-68, (1968). Ministry of
Economy of Pakistan 1947-68, (1968). Ministry of Finance, Government of Pakistan, p. 99
Finance, Government of Pakistan, p. 101

14. “Percentage Distribution of Country-Wise Table on Principal Imports
Imports in 1948-49”
Commodity 1948-49 (crore
Country % Share in Import Rs.)
Chemicals, drugs & 4.22
India 31.8 medicines
United Kingdom 28.0 Artificial silk piece 4.28
goods &yarn
United States 8.1
Cotton piece goods, 38.19
Belgium, France, 6.4 twist & yarn
Italy, West
Other imports 62.51
Germany
Machinery, Mineral 13.19
Japan, China, Hong 9.3 oils, vehicles
Kong
Metals & ores 3.42
Other countries 16.4
Total 125.81
Economy of Pakistan 1947-68, (1968). Ministry of
Economy of Pakistan 1947-68, (1968). Ministry of
Finance, Government of Pakistan, p. 101
Finance, Government of Pakistan, p. 100

16.  Since industry non-existent, international
trade was main sector where large profits
could have been made
(Zaidi, Akbar S., Issues in Pakistan Economy, (2011), OUP. p. 93)
 Foreign trade in private hands.
 To restrict import there was license policy &
exports promoted through various
concessions & incentives where given.
(Twenty Years of Pakistan 1947-1967 by Altaf Gauhar p. 267)

17.  Economies of India & Pakistan were Complementary: Pak exported
cotton & jute to India & imported manufactured consumer goods in
return
 India biggest supplier & consumer of Pakistan’s goods
 Cotton grown in West Pakistan was used in mills in Bombay and
other west Indian cities. Commodities such as coal and sugar were
in short supply in Pakistan--they had traditionally come from areas
now part of India.
 Initially, both countries allowed free movement of goods, persons,
and capital for one year after independence
 This agreement broke down. In November 1947, Pakistan levied
export duties on jute; India retaliated with export duties of its own.
(Source: Ali, Chaudhri M., Emergence of Pakistan, (1973) University of Punjab, Lahore)

18.  Migration of trade expert & wealthy Hindus & Sikhs
traders almost paralyzed economy; we inherited far less
traders
 Emergence of Pakistan in the interest of major
industrialists & traders: Hindu competition out of equation
 Dominance of agricultural commodities in trade (and
exports)
 International trade bridged the gap in foreign earnings
created by lack of industries & Pakistan made full use of
that despite underdevelopment
 Raw materials formed 90% of exports
 Imports: manufactured goods due to lack of industrial
setup
 Many of 22 wealthiest families did exist in 1947
 India to Pakistan was what Europe was to sub-continent

19. Bibliography
1) Zaidi, S. Akbar, Issues in Pakistan Economy, (2005) 2nd
ed.
2) Butt, M. Shoaib, & Bandar, Jayatilleke S., Trade
liberalization and regional disparity in Pakistan, (2009)
Taylor & Francis
3) Qureshi, M. L., Planning and development in Pakistan
4) Gauhar, Altaf, Twenty Years of Pakistan 1947-1967
5) Economy of Pakistan 1947-68, (1968). Ministry of
Finance, Government of Pakistan
6) Ali, Chaudhri M., The Emergence of Pakistan, (1973)
University of Punjab, Lahore
7) 50 years of Pakistan in Statistics1947-1997, Vol. 3 & 4,
Federal bureau of statistics Government of Pakistan