Break­through in bi­lat­eral trade ties with In­dia

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The Trade De­vel­op­ment Au­thor­ity of Pak­istan (TDAP), in col­lab­o­ra­tion with the Fed­er­a­tion of In­dian Cham­bers of Com­merce and In­dus­try (FICCI) and Pak­istan High Com­mis­sion in In­dia, or­ga­nized the visit of a 70-mem­ber del­e­ga­tion to In­dia, led by Pak­istan’s Min­is­ter for Com­merce, Makhdoom Amin Fahim.

Fahim was the first Pak­istani com­merce min­is­ter to visit In­dia in 35 years. The largest-ever del­e­ga­tion to In­dia rep­re­sented 28 ex­portable sec­tors such as tex­tiles, ce­ment, agro food, plas­tics, pe­tro­leum, en­gi­neer­ing, leather, etc.

To serve each sec­tor well, the Trade De­vel­op­ment Au­thor­ity of Pak­istan ar­ranged more than 250 B2B meet­ings in Mum­bai and New Delhi, along with hold­ing two Busi­ness Con­claves as well. The prom­i­nent rep­re­sen­ta­tives to ac­com­pany the Fed­eral Min­is­ter were Tariq Puri, Chief Ex­ec­u­tive TDAP and Za­far Mah­mood, Sec­re­tary Com­merce.

The com­merce min­is­ters of In­dia and Pak­istan have made sig­nif­i­cant break­throughs in eas­ing re­stric­tions on trade be­tween the two coun­tries, with New Delhi ex­pected to with­draw its ob­jec­tions to Euro­pean Union trade con­ces­sions to Pak­istan and Is­lam­abad ex­pected to re­duce tar­iffs on imports of In­dian goods. Of­fi­cials on both sides were highly en­cour­aged by the talks and the two coun­tries are ex­pected to fi­nal­ize a num­ber of agree­ments in the com­ing months.

TDAP and ITPO signed an agree­ment to fa­cil­i­tate the flow of bi­lat­eral trade and or­ga­nize road shows and trade fairs as well as strate­gize ac­tion plans to en­cour­age bi­lat­eral trade. The role of trade pro­mo­tion bod­ies of both coun­tries is sig­nif­i­cant in break­ing the ice be­tween them.

In­dia has sig­naled a sup­port­ive and con­struc­tive role in sup­port of Pak­istan for the EU’S con­ces­sions in or­der to help the lat­ter re­cover from dev­as­ta­tion caused by floods. The Euro­pean Union had orig­i­nally sought to re­duce tar­iffs on 75 goods for a pe­riod of three years, in­clud­ing 67 on which it would be re­duced to zero. Pak­istan cur­rently exports ap­prox­i­mately $1.2 bil­lion worth of such goods, a fig­ure that the EU ex­pects to in­crease by about $136 mil­lion, or 11.1 per­cent, as a re­sult of the con­ces­sions.

Re­cently Pak­istan has also granted MFN (Most Favoured Na­tion) sta­tus to In­dia, which is ex­pected to pro­vide a great im­pe­tus to trade ties be­tween both coun­tries. Pak­istan al­ready en­joys MFN sta­tus with In­dia.

The talks led to a con­struc­tive en­gage­ment to­wards a lib­er­al­ized busi­ness visa regime. Pak­istani en­trepreneurs will now be able to get one-year mul­ti­ple visit visas with no re­stric­tions on their travel des­ti­na­tions. In­dia has also agreed to be­gin ex­port­ing BT cotton seeds to Pak­istan. BT stands for Bacil­lus thuringien­sis, a toxin-pro­duc­ing bac­terium found nat­u­rally in soils, which is ex­pected to in­crease Pak­istan’s agri­cul­tural pro­duc­tiv­ity.

As the talks were aimed at mul­ti­ple sec­tors, the lack of bank­ing ties be­tween the two coun­tries was also ad­dressed as a sig­nif­i­cant hin­drance to trade, since all trade trans­ac­tions are con­ducted and fi­nanced through banks. Cur­rently, com­pa­nies from both coun­tries use Western banks, which charge higher fees. If In­dian and Pak­istani banks be­gin to do busi­ness di­rectly, it will greatly re­duce trans­ac­tion costs for the av­er­age trader in both coun­tries. In this con­text, Tariq Puri shared de­tails about the plan for the set­ting up of for­mal bank­ing links be­tween the two coun­tries. This is ex­pected to come about af­ter a del­e­ga­tion from the Re­serve Bank of In­dia vis­its Pak­istan.

The In­dian com­merce min­is­ter said In­dia is also con­tem­plat­ing re­mov­ing its blan­ket ban on cap­i­tal in­flows from Pak­istan, while Pak­istan has no such ban on In­dian in­vest­ment.

Cur­rently, Pak­istan’s exports to In­dia stand at US $300 mil­lion, while the imports from In­dia stand at US $1.5 bil­lion. In or­der to re­vive the max­i­mum trade po­ten­tial of the two neigh­bour­ing coun­tries, the Tdap-or­ga­nized del­e­ga­tion brought nu­mer­ous non-tar­iff bar­ri­ers to the at­ten­tion of In­dian govern­ment and busi­ness, as the NTBS are im­ped­ing trade growth be­tween the two coun­tries. The visit proved to be an at­tempt by Pak­istan to cre­ate an at­mos­phere of good­will and trust, which is ex­pected to strengthen the Com­pos­ite Di­a­logue tak­ing place be­tween the two coun­tries

Makhdoom Amin Fahim, Min­is­ter of Com­merce, wel­comed by the Fed­er­a­tion of

In­dian Cham­bers of Com­merce and In­dus­try (FICCI) in In­dia.

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