The terrorist attack on Mumbai may lead the government to reconsider entering into a pact with Pakistan for a comprehensive economic treaty. Before the attacks, there were talks going on between India and the Pakistan government relating to a comprehensive economic treaty between the two countries.?
The matter being discussed was that India shall provide real market access to exports from Pakistan and vice-versa by adopting certain measures.
If the treaty is signed then it would include certain benefits like removing the tariff rate quotas (TRQs) for imports into India by Pakistan. India shall remove all non-tariff barriers, in phases in a mutually agreed time-bound manner. In the first phase, such barriers shall be eliminated on the goods of present day export interest of Pakistan on the date of enforcement of the bilateral agreement.
The fructification of the treaty would have allowed Pakistan to export all agricultural products even if public sector agencies in India have the exclusive rights to such trade although no such exclusivity exists in Pakistan. India shall maintain composite rates of tariff on any product of Pakistan origin.
According to the Associated Chambers of Commerce and Industry of India (Assocham), economy is definitely important but at the juncture, there is a need to send strong signals when India has solid proof that the neighbouring country is protecting terrorism and permitting attacks on India.
D S Rawat, secretary general, Assocham said, ?Whatever the government?s decision is, we are with it?. He added that we would strongly support the government’s move which will give very strong signals to Pakistan or any other country which protects terrorism.
The president of Federation of Pakistan Chamber of Commerce and Industry (FPCCI), Tanvir Ahmed Sheikh had earlier said that there are certain identified areas of cooperation that can be taken into consideration such as iron and steel, tea, leather and textiles, energy, wherein greater complementarities exited. This would help in facilitating the bilateral trade between the two countries.
The treaty proposes, nil taxes and non-tariff barriers on imports from Pakistan. The Bureau of Indian standards shall provide national treatment to exporters of Pakistan.