The response of the Indian consumer to the eight-day ?Made in Pakistan? exhibition that closed in New Delhi yesterday surpassed all expectations. Although, with only 69 stalls the exhibition was a modest one, the number of visitors crossed 50,000 with some casual calculations suggesting that sales topped Rs 10 crore. Some of the hottest selling items were cotton fabrics, made-ups and readymade garments, furniture, cosmetics, handicrafts, processed spices and soft drinks.
More important than the sales figures were the trade enquiries from Indian business that poured in and added to the delight of the visitors. Some tie-ups for distributing Pakistani products in India were sealed, more are in the offing. Pakistani businesses also explored partnerships for distributing Indian products in Pakistan.
The exhibition went a long way towards convincing the Pakistani business community that a huge opportunity awaits them in India and that the belief that, with normalisation of trade relations Indians would be the only gainers, is misplaced. Indeed, the exhibition displayed Pakistani capabilities across a range of products, particularly cotton textiles and readymade garments, handicrafts, glass products, hand tools, two wheelers, tyres, and white goods. In all these, Pakistan could make headway in the Indian market. But this is not all. The items on display included only those products in which trade is allowed at present. The enlargement of the list would only add to the possibilities that exist in the Indian market for Pakistan.
There are signs that Pakistani business is now looking at opportunities beyond the Indian market. Earlier this week, a visiting delegation of rice exporters from Pakistan met with Indian manufacturers of rice milling equipment. They want to import Indian machines to enhance their competitiveness in the global market. This is precisely what trade is all about. Leveraging each other?s strength not only to provide a better deal to consumers in home markets but also to jointly make forays in markets of other countries. The add-on would be to work out joint pricing strategies to avoid harmful competition, and also taking common positions in international trade disputes with other countries.
Energy and finance are the other areas where businesses of the two countries are probing options. Enough has been written about gas pipelines traversing through Pakistan or trading in power. What is new is the prospect being explored of Indian companies and mutual funds being listed on the Pakistani stock exchange and vice-versa. Companies of the two countries could also look at floating issues in both markets.
These are just the early signals that the peace dividend in terms of commercial exchanges and relationships could be much larger than one had expected earlier. This is partly because the high wall of hostility between the two countries had clouded awareness of the possibilities that exist. There is also insufficient understanding of the economic policies and business environment on both sides of the border. For instance, the visiting Pakistani business delegation invited by FICCI last week wanted to know about the taxation system in India, the multiplicity of taxes and their rates etc.
The enthusiasm that the prospect of normal trade ties has generated has to be seen to be believed and the comment one hears most from Pakistani businessmen is that there should be no reversal of the peace process. There is enough goodwill in the air to be converted into rapid growth in bilateral trade. Pakistan?s business community is getting convinced that they share a common economic future with India in particular and South Asia in general. Simultaneously it is now evident for Pakistan that India could be a bridge to ASEAN and East Asia. For India, Pakistan could facilitate access to Central Asia and adjoining areas. It is not difficult to see that trade and business bonhomie is the biggest confidence building measure staring both the countries in the face and they need to address the roadblocks urgently.
Some steps that need to be taken are clear. The first is lifting all restrictions on road transportation of goods. The advantage that both sides clearly see in trading with each other would get buttressed when lower transportation costs of goods bought from each other, rather than other parts of the world, are driven home through actual experience. Similar deregulation is needed in shipping, air and rail links. The second is creating awareness about the potential for mutual advantage by actively encouraging exchanges of business delegations and exhibitions. Third is enhancing awareness of the economic climate in both countries.
Both governments could leverage connections established by private sector organisations to take on this challenge. If the two governments could facilitate all this, private sector from both India and Pakistan could surprise observers by the pace at which they accelerate bilateral trade and joint ventures.
The author is an advisor to Ficci. Views expressed herein are personal