GUNNER
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Excerpts From Speech Of Indian High Commissioner At KCCI
Distinguished friends, the SAARC took an important step in your beautiful capital city of Islamabad by concluding an Agreement on South Asian Free Trade Area or SAFTA in 2004. It came into force in January 2006 and its phased liberalization programme became operational from the 1st of July, 2006. In keeping with Article 7, Clause 3(a) of the Agreement, India has maintained a sensitive list of around 850 tariff lines for all the Non-LDC Members of SAFTA, including Pakistan. All other items are subject to Trade Liberalization Programme. For LDCs, we have reduced our sensitive list to around 480. We have also given Zero Duty Access to LDCs from the 1st of January 2008, i.e. one year ahead of the target date. The SAFTA Agreement does not provide for a positive list approach for imports by one member country from another. However, Pakistan continues to follow a positive list approach vis-à-vis India and the list currently stands at a little less than 2000 items. We earnestly hope that this situation will change, so as to bring each and every SAARC country in line with the provisions of SAFTA. Some so called Non-Tariff and Para-Tariff Barriers in India are spoken of from time to time. The examples quoted include requirements of technical standard certification, standard of quality, labelling, marking, packaging, sanitary and health regulations, etc. Such regulations are not unique to India and prevail in all countries. I would also like to emphasise that such regulations in India apply to all our trading partners and are not specific to Pakistani exports to our country. In any case, the issue of Non-Tariff Measures in all member countries of SAFTA has been under discussion by an Expert Group in SAARC.
I would like to recall here the observations made in the Final Report of the Panel of Economists, appointed by your Planning Commission, on Medium Term Development Imperatives and Strategy for Pakistan. The report assesses that bilateral trade between our two countries, which has been around $2 billion per annum, has the potential to grow in a range of $3 to 10 billion. The report talks of several advantages of normalizing trade between India and Pakistan. These include the advantage of geographical proximity and cheaper transportation costs. The shorter distances will also render it unnecessary for industry to carry high levels of inventories of raw material, intermediate goods and parts, thereby reducing the cost of operations. The report observes that opening trade with India will also have a salutary effect on prices. The panel of economists maintains that the fear of the Pakistani manufacturing sector being swamped and rendered uncompetitive by Indian goods is highly exaggerated. Import tariffs have been substantially lowered and the Pakistani industry is already standing up to the competition of cheap imports, including from China. Moreover, if Pakistani exports can compete with Indian exports in the international markets, they can do so in Pakistans domestic market also. As a first step, the report recommends moving to an MFN basis and from a positive list approach to a negative list approach. The report also recommends better transportation links between the two countries for trade. I may mention here that we have started the construction of an Integrated Check Post (ICP)at the Wagah Attari border and work on this project is estimated to be completed by April 2011. The Check Post will have the most modern facilities, both for trade and travel purposes between our two countries. We have also proposed in the past that in addition to the Mumbai - Karachi and Attari Wagah routes, the Khokhrapar - Munabao rail link should also be used for trade. This is in addition to the two routes across the LOC viz, Srinagar Muzaffarabad and Poonch-Rawalakot, which are already functional.
Distinguished friends, the SAARC took an important step in your beautiful capital city of Islamabad by concluding an Agreement on South Asian Free Trade Area or SAFTA in 2004. It came into force in January 2006 and its phased liberalization programme became operational from the 1st of July, 2006. In keeping with Article 7, Clause 3(a) of the Agreement, India has maintained a sensitive list of around 850 tariff lines for all the Non-LDC Members of SAFTA, including Pakistan. All other items are subject to Trade Liberalization Programme. For LDCs, we have reduced our sensitive list to around 480. We have also given Zero Duty Access to LDCs from the 1st of January 2008, i.e. one year ahead of the target date. The SAFTA Agreement does not provide for a positive list approach for imports by one member country from another. However, Pakistan continues to follow a positive list approach vis-à-vis India and the list currently stands at a little less than 2000 items. We earnestly hope that this situation will change, so as to bring each and every SAARC country in line with the provisions of SAFTA. Some so called Non-Tariff and Para-Tariff Barriers in India are spoken of from time to time. The examples quoted include requirements of technical standard certification, standard of quality, labelling, marking, packaging, sanitary and health regulations, etc. Such regulations are not unique to India and prevail in all countries. I would also like to emphasise that such regulations in India apply to all our trading partners and are not specific to Pakistani exports to our country. In any case, the issue of Non-Tariff Measures in all member countries of SAFTA has been under discussion by an Expert Group in SAARC.
I would like to recall here the observations made in the Final Report of the Panel of Economists, appointed by your Planning Commission, on Medium Term Development Imperatives and Strategy for Pakistan. The report assesses that bilateral trade between our two countries, which has been around $2 billion per annum, has the potential to grow in a range of $3 to 10 billion. The report talks of several advantages of normalizing trade between India and Pakistan. These include the advantage of geographical proximity and cheaper transportation costs. The shorter distances will also render it unnecessary for industry to carry high levels of inventories of raw material, intermediate goods and parts, thereby reducing the cost of operations. The report observes that opening trade with India will also have a salutary effect on prices. The panel of economists maintains that the fear of the Pakistani manufacturing sector being swamped and rendered uncompetitive by Indian goods is highly exaggerated. Import tariffs have been substantially lowered and the Pakistani industry is already standing up to the competition of cheap imports, including from China. Moreover, if Pakistani exports can compete with Indian exports in the international markets, they can do so in Pakistans domestic market also. As a first step, the report recommends moving to an MFN basis and from a positive list approach to a negative list approach. The report also recommends better transportation links between the two countries for trade. I may mention here that we have started the construction of an Integrated Check Post (ICP)at the Wagah Attari border and work on this project is estimated to be completed by April 2011. The Check Post will have the most modern facilities, both for trade and travel purposes between our two countries. We have also proposed in the past that in addition to the Mumbai - Karachi and Attari Wagah routes, the Khokhrapar - Munabao rail link should also be used for trade. This is in addition to the two routes across the LOC viz, Srinagar Muzaffarabad and Poonch-Rawalakot, which are already functional.
