Buildup to MFN: Indo-Pak trade through Attari on the upswing

Businessmen hope items traded through integrated checkpost will be increased.

NEW DEHLI:

Even as Pakistan’s cabinet mulls over whether to grant the Most Favoured Nation (MFN) status to India or not, figures released in a study by an Indian commercial organisation suggest that trade has grown exponentially regardless of the bureaucratic hurdles in formalising economic ties.

Indo-Pak trade through the Attari border in Punjab has witnessed a quantum leap in the first nine months (April-December) of the current (Indian) fiscal year, compared to the corresponding period of last year, despite Islamabad’s restriction that allows the import of only 137 items through this dry port.

During the period, India’s imports grew by 93%, while exports witnessed growth of 73.5% over the corresponding period of the last fiscal year. Despite the significant growth in imports as compared to exports, the balance of trade is still in India’s favour.

According to data collected by the Associated Chamber of Commerce (ASSOCHAM), India’s total imports from Pakistan during the first nine months of the current fiscal year – ie April 2012-December 2012 – stood at $238 million, as compared to $123 million in the corresponding period of the preceding fiscal year. Similarly, exports touched $316.28 million during the nine months of the period under review, while they stood at $182.27 million in the corresponding period of the previous fiscal year.



Traders say the inauguration of the Integrated Check Post (ICP) at the Attari border in Amritsar (Indian Punjab) on April 13 last year, to facilitate trade between India and Pakistan, is one reason behind the increase in the trade volume. With the commencement of the new ICP, the infrastructure set up can handle ten times the number of trucks that pass through it to move on either side of the border, as against only 100-150 trucks earlier. During the period reviewed, about 51,000 trucks passed through the border to either country.

But though traders dealing with imports and exports to and from Pakistan are upbeat about the ICP project, they do want Pakistan to grant the MFN status to India as soon as possible. They also hope that the list of items allowed to be traded through this route will be extended, as Pakistan has still not allowed the free trade of items across the Attari-Wagah border despite it being the cheapest and shortest trade route.

In March last year, Pakistan notified its negative list for India: which means that, barring 1,209 items, India can now export all products to Pakistan. However, Islamabad has allowed the import of only 137 items through the Attari land route, instead of the nearly 2,000 items which were allowed earlier under the positive list. Traders believe that trade will swell further if Pakistan allows the entire list of about 7,500 items that can be imported from the Indian side through the Attari crossing.

According to the ASSOCHAM study, the opening of the ICP and Pakistan’s granting MFN status to India can increase bilateral trade to $8 billion a year in the next two years, from the current level of $2.6 billion.

Published in The Express Tribune, January 5^th, 2013.

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