Their government may be vacillating on trade normalisation with India, but traders and manufacturers representing Pakistan at the India International Trade Fair (IITF), currently on at New Delhi, are longing for the trade barriers to go down.
Right now, India and Pakistan have no formal trade agreement. While India accorded MFN status to Pakistan in 1995-96, it has not been reciprocated. Pakistan commerce secretary Zafar Mehmood, during his visit to New Delhi on November 13-17 for secretary-level talks, had said his country would soon accord MFN status to India.
But Nasir-ud-din Sheikh, chairman of the standing committee on fairs & exhibitions, Federation of Pakistan Chambers of Commerce and Industry (FPCCI), is more clear on the issue. He tells FE at the trade fair that talks of according most favoured nation status to India by Pakistan are a sign of cheer for the industry and traders, as he sees a huge potential for trade to increase, not just with India, but other Saarc nations connected through a land route to India.
?Once trade opens with India, we would be able to reduce our transaction costs in exports to nations like Nepal, China, Bangladesh, etc, which currently Pakistan has to route via other nations and the sea,? he feels. He adds that Pakistani traders and manufacturers prefer to export their products to India, given the common cultures.
Expressing similar sentiments, Sapna Kavita Oberoi, executive and life member of the Faisalabad chamber of commerce and industry, says, ?Talks on MFN status to India have been going on for quite sometime and though politically the decision is being delayed, the industry really wants it to happen soon.?
The status means India would enjoy the same trade advantages (lower tariffs for instance) Pakistan grants its other trading partners. Pakistan will permit imports of many more Indian products than it does now, except for a small ?negative? list, thus moving away from the current system where there is a positive list of only 1,934 items. Trade between both countries in FY11 was $2.66 billion, which both nations have vowed to increase to $6 billion in the next three years.
Other entrepreneurs leading the Pakistani delegation at the IITF say a lot of illegal trade taking place across the border often leads to conflicts, but once the trade gets normalised, it will enhance the trade potential and give an extra advantage to manufacturers in both the countries. Rough estimates say around $700 million worth of illegal trade takes place currently between the two countries because of the trade restrictions that Pakistan has with India. Praveen Bashir Qaimkahni, who has been trading with India for past 15-17 years and is also a lifetime member of Saarc, says, ?When we come to India we feel that it is our second home. Pakistani goods are in great demand here and so are Indian goods in Pakistan.?
Sayyada Dhanji of Mars Hoor Gallery, manufacturers and exporters of apparel, says she has been trading with India since 1998 and 80% of her revenues come from exports to India alone.
Saeeda Bano, also a member of the standing committee on women entrepreneurs, FPCCI, says, ?We feel the trade barriers only restrict business from growing and serve no other purpose.? A study by a public sector bank in Pakistan had also highlighted that currently only 2% of the trade potential has been achieved and if Pakistan opened up, bilateral trade between the two countries would increase by ten times very quickly. There are other traders who feel that politics is ruining trade from reaching its real potential. Mustafa Hassan Qureshi and Juniad Hidayat, both working with an oil mill in Pakistan, say a lot of people are hush-hush about the MFN status talks, there are political lobbies working against it, but they must realise that business is suffering because of the delay.
