India embraces Pakistan trade plan
New Delhli(SANA)India welcomes Pakistan’s decision to phase out major restrictions on Indian imports by the end of this year, a move to normalise trade ties between the nuclear-armed neighbours.
“Flourishing trade is the biggest confidence building measure among any two nations” and improved economic engagement will help build peace and stability, India’s Trade Minister Anand Sharma said in a statement. Sharma visited Pakistan last month.
India’s Foreign Minister SM Krishna thanked Pakistan for deciding to gradually scrap the “negative list” that prevents the export of hundreds of items from India. “Pakistan is moving in the right direction in terms of bringing economic content into the political relationship,” Krishna told reporters in New Delhi. “This would certainly help strengthen our bilateral ties.”
Islamabad has decided in principle to phase out the negative list between the two countries by December 31, 2012, which will complete the trade normalisation process. India’s Associated Chambers of Commerce and Industry, a trade body estimated that the move will increase cross-border trade to over $6 billion by 2014. Direct trade between India and Pakistan currently constitutes less than one percent of their respective global trade.
India exported goods worth $2.33 billion to Pakistan last year while its imports were $330 million. In 1996, India granted Pakistan “most preferred nation” status which is intended to remove discriminatory higher pricing and duty tariffs.
This decision will mark a dramatic shift in the lines that can be traded, as it would mean that now almost 90 per cent items can be traded with Pakistan as opposed to 17 per cent earlier, an official statement said on Wednesday.
The Pakistan Cabinet reportedly gave its nod for a ‘small’ negative list around 1,200 items that are barred from trade with India.
But the latest move will permit India to export around 6,800 items to Pakistan. At present, Pakistan’s positive list allows imports of only about 1,950 items from India.
This development reaffirms the commitment of both Governments for trade normalisation as per the roadmap drawn during the visit of Pakistan Commerce Minister last year. There is reiteration of commitment that the negative list will be phased out by this year-end, the statement said.
Welcoming the development, the Minister of Commerce, Industry and Textiles, Mr Anand Sharma, said “during my visit to Pakistan earlier this month, their Prime Minister and Trade Minister had assured me that a final decision in the matter would be taken by February-end and I am happy that this has been achieved.”
Meanwhile, Mr M. Rafeeque Ahmed, President, Federation of Indian Export Organisations (FIEO), said the move will open massive opportunities for Indian exporters. It will limit use of third country for exports to Pakistan, he said.
Direct exports from India to Pakistan will cut down the cost and will benefit consumers in Pakistan, he said, adding that the move will gradually pave the way for Most Favoured Nation status to India.
Mr D.S. Rawat, Secretary General of Assocham, said, “The move will also lead to negotiations to step up investments by businessmen in both the countries.”
Dismantling trade hurdles will increase official trade between the two countries to cross $6 billion by 2014, he said.
The nuclear-armed rivals agreed last year to broaden the number of goods that can be traded between the countries and to grant more business visas as they move to normalize economic ties that have been hampered by distrust and hostility since they gained independence from British colonial rule in 1947. They vowed to dismantle tariffs on about 8,000 items by the end of this year, with all restrictions being lifted by 2013.
“The next big step we need to see is how quickly both countries bridge the trust deficit and do away with the non- tariff barriers,” said Sakib Sherani, chief executive officer at Macroeconomic Insights Pvt. in Islamabad and a former economic adviser to Pakistan’s Finance Ministry. “In the interim, India will benefit more than Pakistan because of its industrial strength.”
India-Pakistan Chamber of Commerce and Industry President S. M. Muneer said that without the provision of banking services, opening of letters of credit, and cross-border transactions of funds, trade could not taken place. He urged both countries to remove non-tariff barriers. He said trade facilitation through expeditious border crossings, streamlining documentation requirements, border agency coordination, opening of new border crossings, quick customs clearance and electronic data interchange was required immediately.
Former President of the Karachi Chamber of Commerce and Industry, Nasser Hyatt Maggo, said India should now take the initiative to respond to the concerns of Pakistan businessmen. “It is time that a liberal visa regime is put in place. Rather than restrictions, both governments should help in facilitation of trade at the borders,” Mr. Maggo added.
Federation of India Chambers of Commerce and Industry (FICCI) Secretary General Rajiv Kumar said, “This will not only normalise India-Pakistan bilateral trade but also pave way for much higher intra-regional trade within the SAARC region.”
“FICCI is especially satisfied with this development because it has been pursuing the cause of normalisation of India-Pakistan bilateral ties vigorously over the last one year,” he added.
Win-win for both
The Confederation of Indian Industry (CII) said a majority of tradable items of both sides would be freely permissible which would be a clear win-win for both sides. “Pakistan can import raw material and finished goods from India at competitive prices and India can get benefit of the strength of the many sectors where Pakistan is strong,” Sunil Kant Munjal, past President of CII, said.
Direct trade between India and Pakistan constitutes less than one per cent of their respective global trade. India exported goods worth $2.33 billion to Pakistan last year while its imports from Pakistan were $330 million.
India embraces Pakistan trade plan | South Asia | South Asian News Agency
Pakistan, India to normalise trade
Pakistan will normalise trade with India by the end of 2012, Islamabad announced, signalling its commitment to liberalising trade with its regional rival.
Pakistan will normalise trade with India by the end of this year, the government announced, signalling Islamabad’s commitment to following through on a pledge last year to liberalise trade with its regional rival.
A government statement said Pakistan will phase out restrictions on most imports from India by December 2012, the Associated Press reports, reflecting weakening opposition to trade ties between the two countries from Islamist groups and the military.
Formal trade between the Pakistan and India is worth $2.7 billion a year, according to the BBC. The World Bank estimates that trade could increase to as much as $9 billion if barriers are lifted.
Islamabad currently imposes severe restrictions on a wide variety of goods, including sugar and textiles, and Pakistani traders can only legally import around 2,000 items from India. The decision now means that Pakistanis can import anything from India except for 1,200 items on a ‘negative list’ which is to be eliminated by the end of the year, according to The Hindustan Times.
The push to remove trade barriers between the pair have fuelled hopes of closer political links.
Pakistan, India to normalise trade : Postnoon
