New Delhi, August 9
The Commerce Secretaries of India and Pakistan today started their two-day talks under the Composite Dialogue process on a positive note and both sides were hopeful of a concrete outcome tomorrow despite Pakistan’s rejection of long-standing Indian proposal to grant the Most Favoured Nation (MFN) status to India.

India, too, is reconciled to the fact that Pakistan would never give the MFN status to it. Moreover, the issue would die a natural death from January 1, 2006 when South-Asia Free Trade Agreement (SAFTA) comes into operation and the MFN would no more remain an issue between the two neighbours.

Contrary to reports given by a news agency, Pakistan did not reject the Indian suggestions of importing diesel and tobacco from India and opening up the Wagah-Attari border route to more items for trade than the existing nine items, including onions, potatoes, tomatoes, garlic, meat and sugar. Pakistan is seized of an Indian Oil Corporation proposal to sell 325,000 tonnes of diesel at discounted prices.

The two Commerce Secretaries — India’s Mr S.N. Menon and Pakistan’s Syed Asif Shah — negotiated on amending the existing shipping protocol to liberalise the highly restricted trade regime. If negotiations go off well on the concluding day of talks tomorrow, a deal can be clinched by the two countries.

Pakistan is game for amending the shipping protocol, Pakistani diplomatic sources said. When Pakistan Prime Minister Shaukat Aziz came to India last year, he had stressed the need for opening up sea route for trade.

Linked with this is the issue of further opening up of the Wagah-Attari border route. Like in the past, today also India asked Islamabad to add more items on the list of items tradeable through Wagah-Attari route. The Pakistani response was that it was open to the suggestion and the “Positive List” was constantly under review, but it cited the congested topography of the Wagah border and Lahore as a logistical restraint for increasing trade from this region beyond a certain point.

The Indo-Pak bilateral trade has already tripled in the past one year to $ 600 million and it is tipped to cross $ 1 billion mark soon after Pakistan starts importing Indian sugar. If one goes by trade figures, the Pakistani fears of its markets being swamped by Indian goods seem to be coming true as Indian exports to Pakistan stand at $ 500 million while the Pakistani exports to India are a measly $ 95 million. The balance of trade is going to be all the more favourable to India after India starts exporting sugar.