Low volume of trade between Pakistan and India: non-enforcement of bilateral trade agreements pinpointed as cause

Low volume of trade between Pakistan and India: non-enforcement of bilateral trade agreements pinpointed as cause
Business Recorder, December 03, 2008

By Raja Aqeel & Tahir Amin

Non-implementation of bilateral trade agreements and security issues are major hurdles in increasing volume of trade between India and Pakistan, said Siddhartha Mitra, Director Research, Consumer Unity Trust Society (CUTS) International.

In an exclusive interview with Daily Business Recorder here on Tuesday Mitra of Jaipur-based CUTS said that trade barriers should be minimised and trade facilitation infrastructure should be put in place on both sides of the border to maximise the volume of trade between the two countries.

Moreover, Confidence Building Measures (CBMs) process must continue to give peace a chance. Mitra is a member of Indian delegation attending the three-day 11th Conference on “Peace and Sustainable Development in South Asia” held under the aegis of Sustainable Development Policy Institute.

About the main hurdles in Pak-India trade Mitra said, “There is a positive list of items being traded between the two countries. Most of the countries follows negative list (items can’t be traded) as it is fixed and changes are not made every now and then. This is the era of innovation and many tradable items are adding every day to the trade basket”.

When asked what step Pakistan should take to promote trade with India, he opined, “It is need of the hour that Pakistan should give Most Favoured Nations (MFN) status to India which India has given to Pakistan in 1996. Non-tariff barriers like sanitary and psyto-sanitary measures should be uniform in both the countries.”

About the trade facilitation measures being taken on both sides of the border, Mitra said that Indian was deficient in trade facilitation infrastructure like storage sheds, docks and proper goods clearance facilities. These facilities must be put in place for keeping consignments safe in the warehouses before clearance procedure is completed, he underscored.

He opined that both the countries were deficient in translating all the trade agreements into practice. Much of the trade routes have been decided in principle between the two countries on papers, but these pacts lack implementation, as there is very meager trade through these routes.

About the steps for increasing trade volume between the two countries Mitra suggested that import substitution strategy should be adopted ie the goods which are produced cheaply in India be imported by Pakistan, similarly items whose cost of production is less in Pakistan be imported by India.

For instance, potato seeds are much cheaper in India, Pakistan instead of buying it at high rates from other countries and giving to farmers at subsidised rates should purchase from India which is in benefit of both the countries.

In case of heavy transport like CNG buses Pakistan must explore the nearest market first and if buying from India is cost-effective Pakistan must avail the opportunity, similarly India can import cars from Pakistan depending on the make and model of the vehicles, he added.

He said it is astonishing to note that Indonesia, which is far away as compare to Pakistan has $7 billion bilateral trade with India, whereas its neighbour’s (Pakistan) trade volume is just $1.6 billion. Regarding the measures that are needed to lessen travelling barriers between the two countries, he said visa restriction should be relaxed, there should be frequent exchanges of politician, students and cultural delegations, so that people on both the sides of the divide understand each other in a better way.

This would help in removing the misconceptions between them. “We need to discover each other through promotion of tourism.” For nurturing strong and stable relations between the two countries he suggested of building trust between the two countries, urging both the countries to make joint efforts to fight terrorism and develop an anti-terror mechanism by sharing information to root out this menace as these people are few in number.

CBMs should continue to give peace a chance. He stressed that media on both sides must play constructive role in delicate situations like Mumbai terrorist attacks as efforts for normalisation of relations are badly hampered by taking extreme positions. “We must learn from the history and work together for promoting peace which is necessary for sustainable development in the region.

This interview can also be viewed at: http://brecorder.com/

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