NEW DEHLI: India and Pakistan which are still at loggerheads on Kashmir and no closer to a full peace deal are channelling their efforts into increasing trade in the hope that business can bring them together.
Traders in Pakistan are eager to seize the opportunities offered by easier links between the estranged neighbours, which have fought three wars since independence in 1947.
The improved relations between the nuclear-armed rivals stem from Pakistan’s decision to grant India “Most Favoured Nation (MFN)” status by the year end, meaning Indian exports will be treated the same as those from other nations. Indian commerce secretary Rahul Khullar said that Pakistan’s decision to grant India MFN status by the end of the year was “the game-changer.”
MFN status will mean India can export 6,800 items to Pakistan, up from around 2,000 at present, and the countries aim to boost bilateral trade to $6 billion within three years.
India now also says it is ready to unban investments from Pakistan and the countries are planning to allow multiple-entry business visas to spur exchanges, a key demand by business executives.
The warming commercial ties underline the new relevance of the private sector in the peace process, with prospects still low for any rapid settlement of the core Kashmir issue.
Indian and Pakistani officials have been looking at the so-called “China option” as a model, with deepening economic engagement seen by experts as crucial to establishing lasting peace in the troubled region.
“There is no other option but economic interdependency between India and Pakistan which will lead on to other partnerships,” Indian Commerce Minister Anand Sharma said at the Pakistani trade fair in Delhi. “We have to recognise our true trade potential and leave our children with a legacy that ensures prosperity, harmony and peace” he added.
Some Pakistani businesses have protested against the trade opening, fearing they may be swamped by cheaper Indian goods, especially in drugs, auto parts and consumer goods. However, others eye the possibilities India’s market of 1.2 billion people offers.
Indian businessmen are equally enthusiastic, saying there is an opportunity for trade in areas from agriculture, information technology, pharmaceuticals, engineering to chemicals.
Official bilateral trade figures between India and Pakistan is just $2.7 billion and heavily tilted in New Delhi’s favour, but Indian business chamber Assocham estimates up to $10 billion worth of goods are routed illicitly through Afghanistan or shipped from Singapore and the Gulf.
Published in The Express Tribune, May 3rd, 2012.
More in BusinessOGRA proposes lower gas theft and leakage ceiling