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Samjhauta blasts
Indo-Pak trade |
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Indo-Pak trade
The
trade dynamics between India and Pakistan is difficult to measure in numbers. Currently, the official trade stands at $2.6 billion every year, which is not very big, but experts estimate that the potential for trade is 10-20 times more. Furthermore, there is a chunk of trade which happens through third-party countries. More than the numbers, India-Pakistan trade is an emotive issue peppered with shared history, culture and nostalgia with the overhang of cross-border tensions which have affected trade engagement. There is also the fervent hope now that trade will open the doors for better relations between the two countries and peace and prosperity in the region. SM Muneer, president, India-Pakistan Chamber of Commerce and Industry, says: “Bilateral trade is a matter of mutual interest and gain, considering that both countries have a common border, common geography, historic legacy, similar culture, customs, norms, minimal transportation cost and identical taste. But unfortunately, they have enjoyed very little trading relations over the past decades. Both countries always try to find ways to reduce dependency on each other and expand bilateral relationship on the basis of political interest instead of economic interest.” Talking turkey At the policy level, trade talks have been countering headwinds. Making a statement in the Lok Sabha on relations between India and Pakistan, External Affairs Minister Salman Khurshid recently said: “Among the outcomes of the resumed dialogue are the signing of a new visa agreement and the commitment by Pakistan for establishing a normalised trading relationship with India, including by granting India MFN status. All provisions of the new visa agreement, except the provision for permitting group tourism, were operationalised by April 2013. During the Commerce Secretary-level talks in Islamabad in September 2012, both sides developed an agreed roadmap for normalisation of bilateral trade. However, Pakistan has not been able to implement the steps it had committed to undertake in the roadmap.” That there are hiccups in the pace of implementation of already announced measures was evident when Commerce and Industry Minister Anand Sharma skipped the India Show organised by Ficci in partnership with the Ministry of Commerce and Industry in Lahore last week. On the Pakistan side, the event was supported by the Federation of Pakistan Chambers of Commerce and Industry, Lahore Chamber of Commerce and Industry and Trade Development Authority of Pakistan. Taking a knock The trade relationship does not gather momentum as it gets hit by cross-border incidents which lead to a border and trade shutdown. Recently, trade on the J&K border was shut for three-four weeks due to a seizure of Rs 100 crore worth of heroin from a truck. Earlier, the first ministerial-level dialogue took place after a hiatus of 16 months at the SAARC business summit last month. In a bilateral meeting, trade ministers Anand Sharma and Khurram Dastgir Khan announced a series of steps, including round-the-clock trade activity at the Wagah-Attari border, allowing container cargo, opening bank branches, allowing business visas in bigger numbers and non-discriminatory market access (NDMA) for both countries. The NDMA nomenclature has replaced most-favoured nation (MFN), which apparently when translated, takes on a meaning which is objected to by some sections. Sharma put off his visit as reportedly three main issues are still hanging. These include proposals on allowing trade of all goods through the Wagah-Attari border, dismantling of the negative list of 1,209 items and bringing down the sensitive list of items to 100 under the South Asia Free Trade Agreement (SAFTA) over a period of five years. At present, only 137 items can be traded through this border. The NDMA remains the big bracket item and Pakistan industry expects something to happen on the issue in the next 20 days. Speaking in Lahore at the inauguration of the India Show, Khan made the point that progress on trade could only be so much and a composite dialogue involving the foreign ministry also needed to be started. He said visa restrictions were the biggest non-trade barriers. Business first Businessmen from both countries have stressed on the fact that economic relations should not get affected by political issues. Sohail Lashari, president, Lahore Chamber of Commerce and Industry, says trade between the two countries is a good omen. “It has financial implications in boosting exports but the intangible benefit is that it is also the best way of defusing tensions. In time it will create a thaw in relations. Once the irritants are removed, the unfortunate events that cause a border shutdown will be averted and it will be business as usual.” He said encouraging people-to-people contact had been positive, adding that tourism should be encouraged as it only needed a visa and there were several locations of interest on both sides. Leading the Indian delegation, Jyotsna Suri, senior vice-president, Ficci, and chairperson, Bharat Hotels, also pitched for greater focus on the trade and hospitality sector to enhance trade ties. She said tourism could act as a multiplier for a wide range of activities like airlines, handicrafts, taxi and tour operators and employment. Lashari said a mechanism of joint inspection of trucks coming from the border would create a better atmosphere. Right now only trade could take place as investment required trust. There was a need to open the entire line of products for allowing trade and settling non-trade barriers. This is the first time a woman Indian business leader, Jyotsna Suri, led a 400-member delegation to Pakistan. “The India Show comprising around 130 Indian companies across sectors showcased their products which received an overwhelming response from the Pakistan business community and the public at large. This is another positive step in improving economic engagement between the two neighbours,” she said. Among the companies that participated included several jewellery chains and textile manufacturers. Sucha Singh Gill, Director General, Centre for Research in Rural and Industrial Development (CRRID), Chandigarh, said electricity trading, opening of bank branches, facilitating mobile roaming and creating a no man’s land at the border for trade were steps that could be taken to enhance trade.
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