The study identifies areas of opportunities and urges the govt of Pakistan to negotiate reciprocal treatment with its Indian counterparts. ILLUSTRATION: TALHA AHMED KHAN
The study identifies areas of potential growth opportunities and urges the government of Pakistan to negotiate reciprocal treatment with its Indian counterparts to achieve level playing field in trade on both sides.
The study has estimated a potential bilateral trade of $18 billion using current trade statistics between Pakistan and India. Of this potential, $3.6 billion is Pakistan’s potential to export to India, whereas the balance represents India’s potential export to Pakistan.
Recent talks suggest that once Pakistan grants Most Favoured Nation (MFN) or Non-discriminatory Market Access (NDMA) status to India and opens the Wagah-Attari land route for all items (137 currently allowed); India will reduce its sensitive list down to 100 select items.
With the grant of MFN, South Asian Free Trade Area (Safta) regime will also kick in where Pakistan will give concessionary treatment to India along all products except items in Pakistan’s sensitive list.
The PBC study, however, argues that Pakistan cannot benefit from a simple pruning down of India’s sensitive list, as majority of Pakistan’s potential to export lies along products that are not protected by India under its sensitive list.
It is in fact, India’s Para-tariffs and strategically placed non-tariff barriers that are in some cases specific to sectors such as textile, agriculture and automobiles that largely restrict market access for Pakistani exporters.
At present, Pakistan protects its domestic interests through the sensitive list and the negative list but the latter will no longer be operative once MFN to India is granted. The concerns of the agricultural lobby and domestic producers, particularly automobiles and pharmaceuticals thus appear to be reasonable.
With only a limited number of products allowed on the sensitive list under the Safta regime, the cheaper Indian products could hurt domestic interests.
India on the other hand is expected to continue to protect its interests with its systematic network of Para-tariffs, Non-tariff barriers and subsidies, not offering reciprocal treatment to Pakistan.
Published in The Express Tribune, April 22nd, 2014.
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Yes, there will be more imports of Indian goods into Pakistan than what Pakistan would export to India. But, this trade imbalance has to be looked at a broader level. What is going to happen is Pakistan will correspondingly reduce the current more expensive imports from western countries by substituting with cheaper Indian products. The net effect would be that Pakistan will see an overall reduction in import costs.
@Ghostrider: Well....how long do you think you guys can survive on dole outs? Apart from these last 6 years, you always needed money from US to run the house. I don't think its going to work any more now since US has burnt its hand with you guys and China...well, they are very good in taking all the money and not particularly known for charity.
@Bharat R: Modi should do what you are suggesting after coming in power. See what he will do in this regard ove ryour valuable suggestion which will be helpful in sorting out our own leftist morons.
@Ghostrider: PErhaps you have not noticed but after reneging on their commitments multiple times even Manmohan Singh's government who was bending over backwards to try and please Pakistan has stopped taking Pakistani negotiators seriously.
The issue is not about how large a market Pakistan is but the deliberate and repeated reneging by Pakistan on its commitments with regards to both trade and visa liberalisation.
@Saleem: LOL.... u do not manufacture engines in your country....and definitely not euro 4 ....keep fooling the not so bright people here......:)
@BruteForce: First of all there is no chance of pharmaceuticals coming out of negative list...next up, this tone of giving us "perspective" is condescending because apart from last 6 years we know really well how to manage economy.
@Ghostrider:
India Pakistan are already trading via Dubai. Who is the beneficiary? The middle man.
We are just giving you a perspective how big Pakistan is.
Since, we are trading indirectly, we might as well trade directly and give the benefits to the people of India and Pakistan.
If cheap, living saving and/or life saving medicines come to Pakistan via Dubai, there will be a huge markup. Who is at loss?
@indian folks
If trade with Pakistan is so insignificant then why bother, this topic always seems like a raw-nerve for Indians
Excellent analysis. We tried to export 4 stroke euro 4 rickshaw engines to India but were prevented at every step of the way by Indian customs until we gave up.
So trading with China is good, PM of Pakistan goes to China and talks about reviving the Silk Road.
China is a known currency manipulator, has trade barriers just like India, subsidises a lot of sectors just like India.
Yet, trade with China is good but with India its disastrous.
Come on.. Just say Pakistan hates India so much that it can't even be civil and trade with it.
Who needs this trade with pakistan ?
If Pakistan is sooo concerned about trade imbalance, then it should stop tradng with many countries - including the closest friend China.
Anyway Pakistan does not have any major trade relationship with India, so it is a question of future.
But with this policy, as stated in the article, Pakistan should act on the present trading partners.
Yawn It's OK Pakistan. China/EU and US are the major importers of Indian stuffs. Pakistan has a very little share of India's international markets. So it won't even matter to entire Indian economy as whole. You please continue being a colony of China.
Why is india even earful to what Pakistan says? It must go to WTO and sue them. MFN is a must for all trading countries under it. Every day it's not given is a violation done by Pakistan. There's limit to generosity by india. 2. Why should india lower its barriers just for Pakistan? These barriers are not Pakistan specific but general to all countries in nature. It maintains standard, quality, hygiene, before importing any material into indian market. Why should we lower that and compromise the safty of our citizens?
Why is india even earful to what Pakistan says? It must go to WTO and sue them. MFN is a must for all trading countries under it. Every day it's not given is a violation done by Pakistan. There's limit to generosity by india. 1. Why should india lower its barriers just for Pakistan? These barriers are not Pakistan specific but general to all countries in nature. It maintains standard, quality, hygiene, before importing any material into indian market. Why should we lower that and compromise the safty of our citizens?
It is clear that the vested interests of Pakistani institutions do not want liberalization of trade with India. They should rest assured that this will not happen very soon. Manmohan Singh will np longer be PM after May 2014.