There is machinery etc. that is imported from China which India does not provide. You can look at the list they come up with after talks.
Everytime some significant Chinese investment or exports come in, they help Pakistan set up infrastructure etc. There is a qualitative difference in what we get from China than what we get with India (which may change in the future, but is not the case currently).
Econ101? What is that?
A free trade agreement with China makes even less sense from that logic. Because Chinese manufacturing sector can reduce costs in a way few other world industries can dream about . And its the case not just with India, or Pakistan but with almost every other major Chinese trading partner.
so the trade imbalance is clearly not a vital factor - when you are comfy bestowing MFN to all middle-eastern and other S.Asian economies - India should not be specially examined.
But what really matters is - even if there is a trade imbalance - the objectives of reduced cost of goods , infrastructure , economic development are served which is far more vital. Modern day economics dont go by the presumption that in event of hostilities , economic ties will break down or default.
Something like that would entail tremendous losses , irrespective of how skewed the balance of payments is - even the economic powerhouse will take a strong jolt.
And any panel of economists who do not know or acknowledge this fact is being quite economically immature.