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India, Pak council to give fresh thrust to trade
Ashok Tuteja /TNS

New Delhi, May 26
India and Pakistan have agreed to set up a Joint Business Council (JBC). Sources said the proposed JBC would be entrusted with the task of formulating ways to enhance economic engagement between the two countries and achieve the bilateral trade target of $ 10 billion.

The trade between the two countries was to the tune of about $ 2.7 billion in 2010-11.

The proposed JBC would consist of business leaders in sectors such as infrastructure, energy, health, power, services, banking, petroleum products, tourism, hospitality and education.

The two governments would fully support the initiative, which is being taken after years of negative vibes from Islamabad, which had been linking trade also with resolution of the Kashmir issue.

India had granted the Most Favoured Nation (MFN) status to Pakistan way back in 1996. However, Pakistan did not reciprocate, apprehending that its own markets would get flooded with Indian merchandise if it were to accord the MFN status to India.

Pakistan seem to have realised that normal trade with India is in its own larger interest. The illegal trade through third countries such as the UAE is detrimental for both the governments as it denies them the tax benefits.

Pakistan recently switched over to a small negative list regime for trade with New Delhi, paving the way for granting it the MFN status by the end of this year. The two countries are also working on opening more entry points along their border, particularly in Punjab, to promote trade. The sources said the opening of the Integrated Check Point (ICP) at the Attari-Wagah border in April has come as a boon for traders on both sides of the border. It has also made life easier for tourists.

Both countries are also in touch on opening of bank branches to facilitate trade. Officials of the Reserve Bank of India (RBI) and the State Bank of Pakistan had met recently and worked out a deal for opening banking outlets.

Another important issue on their agenda is allowing the use of cellular services (roaming facilities) in each others’ territories on a reciprocal basis.

India also proposes to amend the Foreign Exchange Management Act (FEMA) in an important move to allow FDI investments from Pakistan.

Meanwhile, the delay in signing of the new liberalised visa agreement between the two countries has disappointed the business community in India. The feeling here was that the accord, which would enable the businessmen of the two countries to get multiple entry visa, would be signed during the Home/Interior secretary level talks between the two countries which concluded in Islamabad yesterday.

However, the agreement could not be signed since Pakistan wanted that it should be inked at the political level. It may now be signed when external Affairs Minister S M Krishna visits Islamabad in July for a review of the dialogue process. SAARC Chamber of Commerce president Vikramjit Singh Sahney expressed confidence that the much-desired liberalised visa agreement would be signed without any further delay.

Economic Engagement

The proposed JBC would be entrusted with the task of formulating ways to enhance economic engagement between the two countries and achieve the bilateral trade target of $ 10 billion.

It would consist of business leaders in sectors such as infrastructure, energy, health, power, services, banking, petroleum products, tourism, hospitality and education.

The two governments would fully support the initiative, which is being taken after years of negative vibes from Islamabad, which had been linking trade also with resolution of the Kashmir issue