Pranab calls for increased India-Pakistan trade

NEW DELHI - India Tuesday asked Pakistan to reveal the items which are not allowed to be exported from India as it pitched for greater trade and investment ties, saying these would help reduce tensions and resolve larger political issues that have bedevilled relations for more than 60 years.

“South Asian Free Trade Agreement (SAFTA) came into effect on July 1, 2006. Notwithstanding the advocation of the SAFTA, Pakistan has not implemented the provisions of maintaining a negative list of imports beyond which it would permit imports from India,” Finance Minister Pranab Mukherjee said, addressing an Indo-Pak business meet here.

“However, the list of positive items has been increased substantially during the last few years from 773 in July 2006 to 1,934 in September 2009,” he added.

India granted the most favoured nation status to Pakistan in 1996. Pakistan is yet to accord the same status to India.

Trade between India and Pakistan is too small compared to the overall trade baskets of the two countries. The bulk of the trade also takes place through the third-country route, often illegally.

Trade between the two countries grew from $251 million in 2000-01 to $2.3 billion in 2007-08, but dropped 19 percent to $1.81 billion in 2008-09. According to one estimate, the annual trade has the potential to reach $10 billion.

“Sky is the limit in expanding our economic activities, including trade and commerce. A more economically integrated and rapidly developing region could generate a peace dividend. Extended trade relationships would reduce potential for conflict by creating strong constituencies for peace,” Mukherjee said.

He stressed the need for free movement of goods between the two countries.

“Due to geographical proximities, there is a tremendous scope of cheaper transportation costs. The shorter distance will render it unnecessary for the industry to carry higher level of inventories of raw materials and parts, thereby reducing costs of operations,” said Mukherjee.

Concurring with him were the delegates from Pakistan to the meet, organised jointly by the Confederation of Indian Industry, the Pakistan-India CEOs Business Forum and two media groups of south Asia, Times of India and Jang of Pakistan.

“There are many sectors that the two countries can collaborate and business people on either side are raring to go,” said Amin Hashwani, president of the Pakistan-India CEO’s Business Forum.

“But that is not enough, we need infrastructure on both sides and removal of restrictive practices on both sides,” Hashwani added.

The Pakistani delegation includes leaders from various sectors such as textiles, agriculture and IT and a former finance minister, Shahid Javed Burki.