Trade ties: Pakistan, India finalise 3 pacts to remove non-tariff barriers

LCCI president brings up other obstructions to trade, including uncooperative customs officials and labour shortages.

LAHORE: Estranged neighbours Pakistan and India have finalised three agreements to remove non-tariff barriers which were obstructions for Pakistani exports to India, an Indian commerce ministry official has said.

“These agreements are expected to be signed during an upcoming visit by the Indian commerce minister next month,” Arvind Mehta, Indian joint secretary for commerce, said at the Lahore Chamber of Commerce and Industry on Thursday.

The agreements include the Customs Cooperation Agreement, which will avoid arbitrary stoppages of goods at each other’s ports; Mutual Recognition Agreement for acceptance of certificates of internationally-accredited laboratories; and Redressal of Grievances Agreement in case of a disagreement, he said.

“Both sides have also finalised a liberal visa regime that will be in place as soon as the two countries’ cabinets grant their approvals,” said Mehta, who was leading a five-member delegation of Indian regulators to Pakistan.

He said that the peak tariff line in India for Pakistan is 8%, which is going to be curtailed to 5% by end of the year.

Cement trade and other barriers

Mehta clarified that the NTBs over cement export to India were not specific to Pakistan but there is a delay in clearance, which is due to poor infrastructure on both sides. “India is building a customs complex, at the cost of $30 million, which will be complete within three months. It will enable customs officials from both sides to handle 800 trucks daily.”

LCCI President Irfan Qaiser Sheikh agreed that the NTBs hinder meaningful improvement in bilateral trade ties, and pointed out various other barriers to trade.

He said that among other barriers, quality parameters vary from city to city. Clearance requirements and certifications also consume a lot of time and money and multiple conditions have to be met at the clearance stage, such as agricultural permits. He also mentioned licensing requirements for import of vehicles, textile-specific barriers and health and safety regulations.

Sheikh said that currently, Indian and Pakistani customs authorities do not accept lab reports and quality control certificates of consignments conducted by custom labs of both countries. “It is requested that customs authorities on both sides accept reports and certificates provided by exporters and importers of each country as Pakistan and India have the same environment and standards,” he said.

He said that Pakistani authorities are accommodating approximately 150 trucks of Indian consignments daily and Pakistani exports to India have also increased to 150 trucks per day. “But Indian customs authorities clear only 100 Pakistani trucks daily,” he said. “We request them to make every effort to ensure that 150 Pakistani trucks go to India.”

Sheikh also pointed out to unnecessary delays in trade, saying that under a protocol signed between the two governments, Indian and Pakistani customs authorities only allow 10-wheeler trucks and hydraulic dumpers for goods movement. “Twelve- and 14-wheeler trucks should also be allowed to cross the border.”

He said that often, Pakistani trucks return without off-loading due to unavailability of labour on the Indian side, causing Pakistani exporters huge losses in the form of extra transportation charges. He requested Indian authorities to ensure enough labour force to offload Pakistani consignments in their customs yard.