Expecting concessions: Pakistan seeks greater access to Indian markets

Published: September 20, 2012

Meeting between commerce secretaries to be held today in Islamabad. DESIGN: ESSA MALIK


Pakistan and India will begin trade negotiations today (Thursday), with Pakistan seeking greater access to Indian markets before it abolishes its negative list of tradable goods. The list currently contains 1,209 items that cannot be imported from the neighbouring country.

India’s trade policy also bars some Pakistani exports, using an Islamabad-specific sensitive list maintained under the South Asian Free Trade Area (Safta) agreement.

In hopes to achieve a breakthrough over trade restrictions, a 19-member delegation headed by the Indian commerce secretary has reached the capital on Wednesday. Both sides are also expected to sign three trade agreements addressing issues regarding non-tariff barriers (NTBs).

In this regard, commerce secretaries from both countries will hold talks on September 20 and 21. They will discuss phasing out the negative list; the opening of a second land route through the Wagah border; and preferential arrangements under the Safta agreement, according to the Ministry of Commerce. Both sides will also review other broader areas of cooperation; including power, petroleum products and the opening of bank branches in each other’s country.

Both sides wish to review progress on decisions taken during Indian Commerce Minister Anand Sharma’s visit to Islamabad in February this year; which had culminated in an ambitious joint statement on setting up an agenda to normalise relations in less than a year. A recent visa relaxation agreement – signed during the Indian Foreign Minister SM Krishna’s visit – will provide the impetus for further talks.

Outcomes will determine whether Pakistan decides to abolish its negative list by the end of December, granting what is commonly dubbed as the Most Favoured Nation status to India. The decision to designate India as an MFN country has already been made, in principle, given India eases its import restrictions.

In the last week of August, India reduced its sensitive list for Pakistan by 30%; from 878 to 614 tariff lines. This will help reduce peak tariff rates to 5% within three years. But India did not exclude items in which Pakistan enjoys a competitive edge, especially textile products, said a commerce ministry official.

“A review of the reduced sensitive list will be the most important agenda for Pakistan,” he added.

The two sides will also sign three agreements that pertain to NTBs. Memorandums of Understanding for these three agreements had been signed during an earlier visit of the Indian commerce minister to Pakistan.

During negotiations, agreements will be inked for Cooperation and Mutual Assistance in Customs Matters; a Bilateral Cooperation Agreement between the Pakistan Standards and Quality Control Authority and the Bureau of Indian Standards; and on Redressal of Trade Grievances, said the commerce ministry.

But even as the two traditional rivals strive to move ahead, misgivings persist.

“We are suspicious of India’s sincerity in making SAFTA work, as India has two separate sensitive lists for the Least Developed Countries (LDCs) (Afghanistan, Nepal, Maldives, Bhutan) and non-LDCs (Sri Lanka and Pakistan) in Safta,” former commerce secretary Zafar Mahmood had said, while delivering a lecture at the Woodrow Wilson Institute in April this year. Mahmood played a key role in convincing the Pakistani establishment to normalise trade ties with India.

He also stated that: “The Indian sensitive list for non-LDCs is almost Pakistan-specific and restricts market access for Pakistani products, as New Delhi has already signed a Free Trade Agreement with Colombo, nullifying the sensitive list.”

“Because of the past experience of exporting to India, the private sector complains of non-cooperative attitude of import regulators in India and has apprehensions on the smooth operation of the three facilitation agreements,” Mahmood had said. He had gone on to state that the private sector apprehended that India will find ways to nullify the effectiveness of these agreements.

Published in The Express Tribune, September 20th, 2012.

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Reader Comments (12)

  • N.D. Jain
    Sep 20, 2012 - 12:27PM

    It will be good for both countries if trade is made free.


  • sid
    Sep 20, 2012 - 12:33PM

    China will give u concessions ask them……..


  • Hemant Saxena
    Sep 20, 2012 - 3:01PM

    I understand that trade will only boost Indian Economy but why be lenient with a country that constantly works to disrupt the stability of India?

    Trade with this particular country (Pakistan) should be looked at with a perspective to earn and get profit for the country like a business man thinks for expanding his business and not for “Spreading love and brotherhood”. How many years and mistakes will it take to understand that our neighbors only desire India’s downfall and nothing else. On one side we read the news for opening trade relations with Pakistan and on the other we hear constant Shimla pact cease fire violations by Pakistan.


  • Puja
    Sep 20, 2012 - 3:03PM

    Why should india exclude items like textiles where Pakistan enjoys a competitive edge .it should be applied to Pakistan too as it is not allowing products like automobiles,leather products,fertilizers,light engineering machinaries etc… business is very simple give and take..Recommend

  • FU
    Sep 20, 2012 - 5:46PM

    Sorry folks not going to happen. By the time it about to be implemented i doubt whether the present government will be there in power.


  • Giri
    Sep 21, 2012 - 12:00AM

    On lines of OBC quota that Indian Govt is proposing, Pakistan is also proposing some quota for their bussinessmen for they have been oppressed and discriminated for a very long time.


  • Bhatti
    Sep 21, 2012 - 12:26AM

    OMG! what’s going on here? why so many Indians here?? Its a Pakistani New website! how could foreigners be so interested into Pakistani news??? I am so confused 4 out of 5 comments are from Indians… don’t u people have ur own news channels and websites.. I have never been to any Indian news website…and as a matter of fact I don’t even see any point in doing that!


  • Bhatti
    Sep 21, 2012 - 12:27AM

    I know this article involves India… but still its messed up!!


  • Sep 21, 2012 - 2:59AM

    Bhatti: Do you know how many Pakistanis go to ToI to look st photos of Veena Malik and Katrina Kaif?


  • realist
    Sep 21, 2012 - 5:26AM

    “We are suspicious of India’s sincerity in making SAFTA work, as India has two separate sensitive lists for the Least Developed Countries (LDCs) (Afghanistan, Nepal, Maldives, Bhutan) and non-LDCs (Sri Lanka and Pakistan) in Safta”

    I havent heard Sri Lankans compalining. It is just Pakistanis/Muslims who whine all the time and expect tons of concessions. Sorry buddy you aint getting any.


  • Arijit Sharma
    Sep 22, 2012 - 12:43PM

    @Bhatti: ” … Its a Pakistani New website! how could foreigners be so interested into Pakistani news??? I am so confused 4 out of 5 comments are from Indians… “

    Commenting on ET is serious business. Otherwise how will you now our points of view ?


  • Bhatti
    Sep 23, 2012 - 12:41AM

    @Arijit Sharma:
    Okay! If u say so!


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