Even though trade barriers between India and Pakistan have lessened, the unofficial trade between the two countries has increased by 37 percent in 2005-06 to touch 965 million U.S. dollars, said an Indian report released here Sunday.

The report, conducted by The Associated Chambers of Commerce and Industry of India (Assocham), said the official bilateral trade stood at around 700 million U.S. dollars in 2005-06 while the unofficial trade between India and Pakistan reached 965 million U.S. dollars during the period.

The unofficial trade between India and Pakistan is increasing due to easier flow of goods and services through a developed network of informal traders across borders that pay no taxes or duties and have lower transaction costs as compared to the formal channels of trade, the report said.

The high transaction costs due to procedural delays and administrative bottlenecks has forced much of the trade, including commodities that are legally tradable, to flow through informal channels, the Assocham report said.

Source: Xinhua