Economic boost: India to work on preferential trade with Pakistan

Published: November 12, 2011
ECC approves addition of 12 goods in positive list of items that can be imported from India: Official.

ECC approves addition of 12 goods in positive list of items that can be imported from India: Official.

ISLAMABAD: Indian Foreign Secretary Ranjan Mathai has said India and Pakistan will take the process of normalisation of trade to its “logical conclusion” and Delhi will also work towards a preferential trade agreement with Pakistan and easing of visa restrictions for businessmen.

The remarks came as senior commerce officials of the two countries prepare to meet early next week in New Delhi to explore ways to boost bilateral trade.

As part of measures to open up trade, Pakistan on Friday removed restrictions on the import of 12 more goods from India.

The commerce ministry had requested the Economic Coordination Committee (ECC), the top decision-making body on economic affairs, to increase the number of items that can be imported from India.

“The ECC met on Friday and approved the addition of 12 goods to the positive list of items that can be imported from India,” a ministry official said.

Another official said the goods included machinery and raw materials for the leather and textile industries.

Both countries have been trying to boost their trade following a recent thaw in ties. Relations have improved since they resumed a dialogue in February that was derailed by an attack by militants in Mumbai in 2008.

Prime Minister Yousaf Raza Gilani and his Indian counterpart Manmohan Singh hailed progress in diplomatic ties and promised a“new chapter” in ties when they met on the sidelines of a Saarc summit in the Maldives on Thursday.

Lasting peace between the rivals is seen as essential to South Asian stability and to helping a troubled transition in Afghanistan as NATO-led combat forces plan their military withdrawal in 2014.

Last week, Pakistan said it would grant India most-favoured nation (MFN) status that would help normalise trade by ending restrictions. India gave MFN status to Pakistan in 1996.

Despite having a combined population of more than a billion, official bilateral trade between the two countries stood at $1.4 billion in 2009-10 while an estimated $3 billion unofficial trade is routed through third countries in the Gulf.

Published in The Express Tribune, November 13th, 2011. 

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Reader Comments (35)

  • pravin
    Nov 12, 2011 - 2:29PM

    “Pakistan and India fought three wars, nuclera archrivals, etc” Is it a must paragraph in any article related India Pak relations?


  • Salahuddin
    Nov 12, 2011 - 2:51PM

    its never too late, a leap in the right direction.


  • ashok sai
    Nov 12, 2011 - 2:53PM


    It’s Reuter’s article and got nothing do with ET, but one notable thing is,Recommend

  • biryani
    Nov 12, 2011 - 3:07PM

    democracy turns out to be more treacherous then dictatorship for the ppl of pak n kashmir…. this is high treason. What mush tried to implement in form of 4 point kashmir agenda, current govt. with military leadership have silently put the dream to reality….. another loss to pak


  • Arslan
    Nov 12, 2011 - 3:08PM

    A good sign. Both countries will benefit from better relations and Trade. Then only can progress be made towards solving the kashmir dispute and to achieve peace in the region.


  • Nov 12, 2011 - 3:10PM

    Good good.. we need trade not wars.. need love not hatred.. :)


  • Indian(Muslim) - Ismail M
    Nov 12, 2011 - 4:36PM

    Peviously it is the thought of some Indians is Indian patriotism means just hate Pakistan. Hope now it wil change. This is a welcome approch, to eliminate terrorism, and india can redirect its military spendings to humanitarian things.Recommend

  • Shamshad Pervez
    Nov 12, 2011 - 4:56PM

    I think the goverment has decided on the policy of SHRINKING THE TRUST DEFICIT AND EXPANDING THE TRADE DEFICIT. By God i am a business man and can someone tell me
    how will we compete with this giant called India. One endosulphan bag costs 3900 PKR while
    India gives it for 450PKR. We will die like insects.


  • Nov 12, 2011 - 5:33PM

    Seafood! Both countries need to zero rate the seafood imports from either of the two origins! A huge untapped market that the countries can benefit from.


  • rambag
    Nov 12, 2011 - 5:36PM

    Betrayal of promise to confer MFN status.


  • Pants on fire
    Nov 12, 2011 - 6:27PM

    Its back to the future. No MFN with a negative list instead we have a minor adjustment to the discredited positive list. This after India cut tariffs to ALL LDC’s from 460 items to about 14 to zero rate at the SAARC summit.

    Pakistan balks at granting MFN which India gave Pakistan in 1996 and previous to WTO gave it to Pakistan under GATT. Pakistan gives MFN status to all other signatories of WTO except India and has made a fetish out of denying India MFN even though it means so so so littleRecommend

  • Harinder
    Nov 12, 2011 - 6:31PM

    The world will see how the these two nations come to terms with there bellgerent history and charter there future life .
    Are these two nation headng in direction of mutuallly assured self destructions through use of Nukes against each other.

    The Martians shall observe with delight and may even have a chapter devoted to it on the

    “PERILS OF NUKES”Recommend

    Nov 12, 2011 - 6:33PM

    Instead of fighting each other , our efforts should be to invest in education , health and trade . Look at Europe . The countries which fought each other in the past centuries , are friends .There are no visas restrictions in the EU countries.

    I was born in Banaur , Patiala state . Recently I looked at Banaur in Wikipedia in connection with an article ‘Is Pakistan ripe for a social revolution ?’ which I wrote . I was surprised to learn that Banaur which haa a population of 13000 which has six institutions of higher learning all privately established . The same story is applicable to a place Rajpura also in Patiala state . It has a population of 85000 with 20 colleges all made privately.


  • Waqas
    Nov 12, 2011 - 6:38PM

    @Ismail M

    indeed this is the difference between Pakistani patriotism and Indian patriotism, we love our culture, language, dress etc, thats for us patriotism, for u indians, patriotism = hatred for Pakistan!


  • antanu g
    Nov 12, 2011 - 6:42PM

    right on spot…totally unnecessary references…only to rekindle the enemity.we should get over it


  • hamid
    Nov 12, 2011 - 6:50PM

    If Pakistan and India become two friendly nations, after the solution of Kashmir issue of course, these two would become economic Giants.


  • Abba Jee
    Nov 12, 2011 - 7:06PM

    ET is it necessary to spice the news with herbs like…Pakistan and India have fought three wars, two of them over the Himalayan region of Kashmir, since their independence in 1947 but their relations have improved since they resumed a dialogue in February that was derailed by an attack by Pakistan-based militants in the Indian city of Mumbai in 2008.

  • SYED
    Nov 12, 2011 - 7:23PM

    One of the reasons the subcontinent was divided into a Hindoo India and a Muslim Pakistan was the realisation of the economic domination of the Hindoo Business class. While the raw material (for example jute in Bengal) was produced by the muslim farmers , most of the profit went to Hindoo factory ownwers. Giving the MFN staus to India by Pakistan is one of the gravest mistakes of this government. And do Pakistanis want to buy the shoddy and substandarad goods made in India. And do they really want to deal with unscrupulous Hindoo traders. On top of that it isa well known fact that the Indian courts cannot implement any trade disputes against their own citizens. If you let Indians flood the Pakistani markets with inferior and cheaper goods, soon they will eat you for lunch.


  • jane
    Nov 12, 2011 - 7:58PM

    @Shamshad Pervez: – Hi Pervez – correct me if im wromg , but it’s not about competing against india but rather allowing india to help you with goods at cheaper price than if you bought it from others ? so it is a matter of if you will allow that mutual help to take place – india also hopes to get goods from pak at lesser price than from others – that is the whole idea .- helping each other in obvious areas rather than competeing or even worse – fighting


    Nov 12, 2011 - 8:35PM

    In the present era of globalisation and free trade it is very important step taken by the Indian and Pakistani Govt.To all my pakistani friends there are few positives things as well,pakistan also is going to get a very large indian market.For all the pakistani industries that will be very good thing,lots of employment generation,lots of foreign money earning and dont be afraid if indian goods will start flooding in pakistan,pakistani companies will also try to deliver better service and goods at cometitive rates to their customers.As a common citizen you will get lots of options,you can question the vendor,monopoly of a single company will vanish,once you get goods at lesser rate even if from india,customers from pakistan can question their own estabilished companies that you have to provide us with the same price that indian companies are providing.Pakistani industries would have to change their everything to give better deal to their customers and which will ultimately benefit pakistan.Look china is dominating world market,they are giving products at cheap rates compared to local companies,Does that mean we should not allow chinise comanies to do businees.Rather i find it as a great oppertunity for both pakistani and Indian business estabilisments where lot of joint ventures will be formed in future and cometetive pricing will be in offer for the common citizen of both countries.


  • Logic
    Nov 12, 2011 - 8:58PM

    @Shamshad Pervez:
    Sad Comment. Competition is a good thing. A lot of our industries have been too lethargic for far too long. Competition will revive a lot of the lagging industries, and, granted, perhaps destroy some. If certain industries haven’t been able to establish themselves over the last 54 years then they are simply a burden on our resources and must be put to better use. Basic Competitive Advantage Theory (you should have learnt that in school). We cannot do everything. We should be trading with our neighbours.


  • Me Tarzan
    Nov 12, 2011 - 9:10PM

    @jane: Indian medicines are much cheaper….


  • Javed
    Nov 12, 2011 - 9:24PM

    @Indian(Muslim) – Ismail M:
    I don’t know where you got that. Indian patriotism is linked with its age-old culture and civilization, and unity in diversity across multiple faiths and cultures. While the story is not picture perfect, it is very much internal rather than external driven. We may not like Pakistan, but patriotism and Pakistan have no link. I think from the length of your title that you aren’t an Indian Muslim at all – or these remarks would have sounded different.


  • gk
    Nov 12, 2011 - 9:27PM


    indeed this is the difference between
    Pakistani patriotism and Indian
    patriotism, we love our culture,
    language, dress etc, thats for us
    patriotism, for u indians, patriotism
    = hatred for Pakistan!

    got information from your text book?? loll how u can decide that?
    we love our country and we hate those who send, support terrorism in India, and usually it goes where?? we hates those who want our distruction and who started a couple of wars. why your text books dealing with hatred towards Indians???, why your school teaching hatred and lies? what about that?? Recommend

  • Wonder
    Nov 12, 2011 - 9:43PM

    You have said it the other way round. India has a great indigenous civilization. “Your” language, culture and religion is not yours, but borrowed from others. Recommend

  • Surya
    Nov 12, 2011 - 9:57PM

    Spot on..You covered what i was about to say..


  • narayana murthy
    Nov 12, 2011 - 10:30PM

    I don’t understand this cry from Pakistanis.

    The fact is, nothing Pakistani ever sells. You need to buy forign goods. By buying Indian, you will spend less and avoid more wars (which your trigger happy army cannot, otherwise).

    Just look at Indian matrimonial sites. There are more Pakistanis on Indian matrimonial sites, searching for brides/grooms in Karachi and Lahore than there are on all Pakistani sites combined :)


  • Babloo
    Nov 12, 2011 - 10:39PM

    What is this limited positive list ? India has conferred MFN status to Pakistan for 15 years and there is no such positive list because all imports are allowed.
    This is just betrayal by Pakistan of the MFN status declaration .


  • pakistani citigen
    Nov 12, 2011 - 10:52PM

    @Indian(Muslim) – Ismail M

    You exposed that you are not an indian muslim by saying that for indians patriotism means hate of pakistan.
    This must be the case with pakistanis but not with indians.
    You hate someone who is of your level…Recommend

  • Ali Tanoli
    Nov 12, 2011 - 11:10PM

    Siver, paan, saari, and Bulls are cheaper in india and we can benefited from this.


  • Rehman.
    Nov 13, 2011 - 4:19AM

    We should all be concerned about giving mfn to India. Indian goods are going to be cheaper and superior and are going to completely eat up our indigeneous industry. We are not going to be able to compete with Indian goods and the economy will be negatively affected. Hindu dominated the busineses when we were with India and planning on dominating Pakistani economy again. It is a bad decision and we are the ones who will suffer as Indian goods flood Pakistani markets.


  • Surya
    Nov 13, 2011 - 10:53AM

    @Ali Tanoli:
    “Siver, paan, saari, and Bulls are cheaper in india and we can benefited from this”..Is this all your knowledge base?? I seriously doubt that you live in US…Just to give a sample, read this:


  • jagjit sidhoo
    Nov 13, 2011 - 10:57AM

    @Waqas: Do not paint all Indians with the same brush please read these two links , . We both have our share of madcaps keep them at bay


  • jagjit sidhoo
    Nov 13, 2011 - 11:15AM

    @Waqas: Watch this video Pakistan team in India


  • rehmat
    Nov 13, 2011 - 10:49PM

    “One of the reasons the subcontinent was divided into a Hindoo India and a Muslim Pakistan was the realisation of the economic domination of the Hindoo Business class. “

    It may have been Muslim Pakistan but India never called itself Hindu India. Even today it has successful Christians, Parsis, Muslims, Jains, Sikhs in every field including business. Success in India is not contingent upon religion.

    Are you saying that even after 64 years, Pakistanis are inherently incapable of competing with Indian businessmen? I do not know if that is true. But if it IS true – how does it reflect on Pakistan? If you cannot compete with Indian goods, how will you compete with the rest of the world? How will you get prosperity?


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