This debate touches upon some important underlying issues regarding Pak-Indo trade. Having access to the Indian market theoretically changes the game for Pakistani companies. Suddenly, having a 10 times larger potential customer base borne out of thin air, with very similar values and customs is the dream of salesmen and marketing executives everywhere. But the problem is in the inherent ill will present in the general population on both sides against one another. An animosity cultivated by successive governments looking for any excuse to divert the masses from the lack of progress on internal problems. As a result, Pakistani goods entering India will always struggle to make do just on the basis of their Pakistani lineage. Until the Indian consumer isn't allowed to see foreign products as value producing goods and services, as opposed to the politics behind where those products are from, Pakistani companies will only have an artificial increase in market size. That is to say nothing of the damage to any trade were a conflict to breakout. Pakistani products would be boycotted on mass and all of these exporters would suddenly be too big to survive a Pakistan-only market and collapse on mass.
The other side of the coin has its own pitfalls. Having Indian goods flood the Pakistani market would be a game changer for all. For the consumer, lower prices and greater variety will change what they buy and how they live for the better. The cut throat nature of such competition will spur improvement in the goods and services available. In the end, the winner is the Pakistani consumer and the Indian exporter. The loser in all of this is the domestic Pakistani industry. The four decades the Indian companies were allowed to develop a foundation in the domestic market before having to deal with outside competition created formidable organizations that were able to go toe to toe with any of the famed foreign corporations that entered India after the deregulation of the economy. Those companies have immense production capacities and economies of scale that are unmatched in Pakistan. Once they enter the local arena, Pakistani competitors will get crushed to the wayside.
From a purely economic standpoint, cooperation in trade is a huge win-win for both nations. Indian competition may crush many local companies, but it will compel others to raise their game and allow them to compete on a global level as a result. The consumer will be flush with choices and gain value at a lower price. The losses of local businesses would create short term problems. But problems that are rectified in the long term, as these foreign corporations invariably start investing in local production plants and distribution facilities. It is the nature of globalization: for a nation to lose something and gain it back elsewhere. Why the loss of local companies takes on such doom and gloom is that the owners of these companies are often the power players in local politics. They will always be hard pressed to support any cause that brings them harm, even if the nation wins convincingly as a whole. The government, which is in the end, answerable to such people will always do what it can to prop up inefficient and unsustainable companies in order to safe guard their vote bank and financial backing. Then there is the simple psychology of patriotism. A win for Pakistani companies at the expense of the individual is often erroneously seen as preferable.
If enough people look at the big picture, the future of Pak-Indo trade is bright. But the Pakistan and Indian governments must do more to eliminate the instability of the relations between the two nations. Whether the fault is Pakistani or Indian, change will require an effort from both. In such a case it maybe more prudent to look ahead to prosperity of tomorrow, as opposed to the misjustice of the past.
