Trade talks with India: High hopes, mild expectations in New Delhi
Hopes are high but expectations mild as Pakistan’s Commerce Secretary Zafar Mahmood arrived in the Indian capital on Sunday to provide a fresh impetus to trade talks between the two countries.
The item most likely to top the agenda would be multi-entry visas to businessmen on both sides, Indian officials say, followed by the operationalisation of the most favoured nation (MFN) status to India.
The Pakistani cabinet recently granted an approval to the commerce ministry to negotiate the implementation of the MFN status with India.
Mahmood will meet his Indian counterpart Rahul Khullar on Monday, and review the decisions the two commerce secretaries had taken during their last meeting in Islamabad in April, which was seen as a milestone for bilateral trade between the neighbours.
“Don’t expect earth-shattering announcements,” warns Pradeep Mehta, secretary general of a Jaipur-based NGO.
“The main purpose of the visit is to get some traction on several other issues like the negative and positive list, reduction of non-tariff barriers, visa liberalisation and so on,” Mehta said.
Besides MFN, both sides have decided to establish a preferential trade agreement that will see tariff reduction on a number of items that are traded between both countries and in larger quantities, reduction of sector-specific tariff and non tariff barriers.
Both sides are also working towards creating a multiple-entry visa for businessmen from both sides. At present, the home ministry is examining the issue.
“What had happened in April was a major step, but the level of implementation has become a drag,” said Ram Upendra Das, senior fellow at the Research and Information System for Developing Countries.
“Nevertheless, overall there is a forward movement despite fluctuations and volatilities. At least both sides are now talking, which is important,” Das added.
Both sides have also agreed to expand trade in all types of petroleum products and electricity.
Trade between the two countries stood at $2.6 billion in 2010-11. Both sides have set a target of $6 billion worth of bilateral trade in the next three years.
At present, more than 12,000 items are there on Pakistan’s negative list while 1,948 items come under the positive list.
Meanwhile, Pakistan is expected to prune its negative list of items soon, allowing India to export its textiles, engineering goods, chemicals, raw materials, spices and other such materials to Pakistan.
Published in The Express Tribune, November 14th, 2011.
COMMENTS (11)
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Trade in services is very important. Pakistan with access to Trans Asian Highway, and Trans Asian Railways with access to China and beyond may possibly discuss the transit trade by railways, and roads. Pakistan ratified treaty of ATA Carnet hence transit cargo/goods will qualify tax free access subject to adherence/compliance of the treaty between the respective Governments and customs authorities. Secondly the surface transport sector is important in view of the rail/road network in Pakistan in railway track technology, track, locomotives, trucks, buses, commuters/vans, taxis, motor cycles, sub-compact cars on the model of Tata's Nano for re-export from Pakistan and domestic market consumption. Pakistan qualifies for FTA with China, as India qualifies for FTA with EU for sub-compact cars. Hence Hyundai sub-compact cars enjoy tax free status from India which are assembled in India and exported. Pakistan and India has excellent opportunity to be gateway of transit trade, rail ways, trucks, and transit piplelines for oil and gas. The reciprocal visits are encouraging. Meaningful benefits to the people, economies of the respective country is very important.
@Proud Baloch: Pakistan has MGN with over a 100 countries including Bangladesh. So more than likely if Pakistan is not competitive in a certain area then those goods are already being imported from some other country. If India sells those goods cheaper, Pakistanis will benefit.
Incidentally Pakistan has an FTA with China and FTA gives far better terms. In fact Pakistan imports from China are over %6 billion and exports are a few hundred million.
@Gul:
Completely agree.
@Proud Baloch:
Dude, people buy products for its price and quality. So, if you can make quality products for a price consumers want to pay, you have nothing to worry about. If not, you did not have sustainable business any how and you were cheating consumers all along because you can.
Pakistan should have free trade routes with all neighboring countries. Ideally there should be free trade post on entire border of Pakistan after every 100 kms. Opening trade routes with neighboring countries would shut the war routes.
I think the trade will bring India and Pakistan much closer.
@Proud Baloch: only Indian's low cost materials?
@Not me: very true....thats the only way forward.
Trade should not come at the cost of local industries. Our family has several businesses in food industry in addition to having a number of shares in small to medium sized firms and we fear Indian's low cost materials might destroy our source of income. I hope our commerce minister realizes this
More trade/commerce and enhanced people to people exchange is the way forward. People need peace and progress