MFN status: Indian govt, business hail ‘new era’ in relations

Organisations warn, however, that other trade barriers must be addressed.

Express November 03, 2011
MFN status: Indian govt, business hail ‘new era’ in relations

NEW DELHI: As Pakistan granted India most favoured nation (MFN) status, there were reactions of joy from the Indian government and business community.

“We are clear that economic engagement, removing barriers to trade and facilitating land transport will help the region. Eventually, economic and industrial activity will bring prosperity and stability. It will generate jobs and help the South Asian region,” said Commerce and Industry Minister Anand Sharma.

The Punjab, Haryana and Delhi Chamber of Commerce and Industry (PHDCCI) said the move “will herald a new era in economic relations between the two countries”.

However the trade facilitation organisation, Confederation of Indian Industry (CII), added that outstanding issues which acted as trade barriers needed to be addressed. “Roadblocks like stringent visa rules, non-tariff barriers, communication difficulties and the opening of more trade routes like Wagah still need to be addressed,” said CII Director General Chandrajit Banerjee.

PHDCCI President Salil Bhandari said there was a need to bridge the information gap between the two countries. Investors from both the countries need to have greater awareness about the goods/services and markets of the other. “The governments of both sides should think of setting up of bonded warehouses cum-display centres at the border where goods from both sides could be available. Permission for ‘on-the-spot-sales’ of the displayed goods would further enhance its utility and help in increasing mutual awareness, Bhandari pointed out.

He suggested that one day in a month should be dedicated to each country for such sales. “People from Pakistan can come across the border on a particular day and vice versa. This can happen at the Wagah border,” he suggested.

Trade lobbies in India are assessing how to take advantage of the move.

China, US hails move

Meanwhile, the move by Pakistan was hailed by the United States on Thursday, saying it is a “very, very big deal” that could open up great economic opportunities.

However, US officials said they understood that the Pakistani cabinet had approved a negotiated path to reach MFN – a move they still described as a major development.

“We don’t yet have most-favoured nation status,” State Department spokeswoman Victoria Nuland told reporters.

“We have a decision unanimously approved by the Pakistani cabinet to open a path for full normalisation of trade relations with India” as the commerce ministers of both countries agreed in Delhi in September, Nuland said.

“This is a very, very big deal, very important, could lead to really great economic opportunities for both India and Pakistan,” Nuland said.

It “sets the kind of example” that other countries in South and Central Asia should follow toward building an integrated regional economy that Washington has pushed under its “New Silk Road” project, she said. Washington has sought to put Afghanistan at the center of such a project in a bid to ensure the war-torn nation becomes peaceful and prosperous in the long term.

“We really applaud Pakistan and India for taking this concrete step to improve their relations. It’s the most tangible thing that they’ve done yet,” Nuland added.

China also applauded the move on Thursday saying that improved Pakistan-India relations were vital for peace, stability and development in the region. Chinese foreign ministry spokesperson Hong Lei made the remarks at a press briefing in Beijing, adding that as a neighbour and friend of India and Pakistan, China will continue to support the two sides to improve relations through dialogue and cooperation and accomplish collaborative development.(Additional input from Agencies)


Published in The Express Tribune, November 4th, 2011. 


XOXO | 12 years ago | Reply


The same is applicable to indians visiting pakistan.

Kanishk | 12 years ago | Reply

Already Indian are feeling the heat of opening this bilateral trade. They are purchasing tomatoes at Rs 25-30 per KG, According to TOI report this is due to export of tomatoes to Pakistan. Truck load of tomatoes are going to Pakistan from Nasik area of Maharashtra which is the main provider of this vegetable in these time to Asia's biggest mandi at Azadpur mandi in New Delhi. But instead of selling these tomatoes at Rs 8-10 per Kg at wholesale market these people are sending across the borders where demand is hight because crops have been destroyed by floods.

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