Playing the Indian card

Traders have sought restrictions on Indian imports for Pakistani products to maintain stranglehold on domestic market

How many times has one heard someone use the nationalist argument to further their cause or make appeals to patriotism in an attempt to win debates. Pakistani exporters have certainly done so and seem to have won over the government’s support as well. In an attempt to arrest the decline in exports, which have remained virtually stagnant since 2010-11, industry representatives have played the nationalist card to good effect. They have sought restrictions on Indian imports that would enable Pakistani products to maintain a stranglehold on the domestic market. At the same time, they have urged the government to provide more export incentives, which they say would give them a ‘competitive’ edge as they compete with India in the global market.



There is no denying that over time, the law and order situation, the persistent power crisis and the stuck refunds with the FBR have hurt exporters. After investing billions in machinery and labour, it must be excruciating for industrialists and exporters to see their plants sitting idle while they wait for power. But the arguments they advance should not be seen in a vacuum. In formal bilateral trade with India, Pakistan’s share stands at around 20 per cent. Numbers don’t lie, but, in isolation, they can be highly misleading. Comparisons with India should become a thing of the past. The Indian economy has grown exponentially and so has the competitiveness of India’s exports. Even Bangladesh has edged Pakistan out.

This hasn’t happened overnight. Pakistan, despite boasting of its textile exports and the GSP Plus status, has been left behind because it hasn’t given world markets anything new to offer. With the emphasis being on textile exports, it is interesting that the value of these items sent abroad compares poorly with what the country spends on its imports. This is because our exporters have always kept value-addition and exporting finished goods on the back burner. International markets have become competitive and Pakistan hasn’t. It is as simple as that. Exporters can be given all the incentives and protections they demand, and the value of our exports will still not increase, not even in the long term. Imposing duties on imports of countries citing patriotic and emotional reasons will not increase the country’s foreign exchange revenue. The exporters and the government must realise this.

Published in The Express Tribune, September 14^th,  2015.

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