India upset as Pak fails to keep MFN promise

Islamabad overshoots deadline set by itself

Pakistan has once again disappointed India as it failed to deliver on its promise to designate its eastern neighbour as the most-favoured nation (MFN) to do business with, even as the deadline set by itself has passed with the end of the year 2012.

An upset New Delhi is quietly looking forward to the meeting of Pakistan’s Federal Cabinet, scheduled for Wednesday, although it is still not clear if it has on its agenda any proposal to normalise trade ties with India.

India and Pakistan on Tuesday performed the annual New Year’s Day ritual of exchanging lists of nuclear installations and facilities in each other’s country in accordance with a 1988 bilateral agreement.

They have also exchanged lists of each country’s nationals held prisoners in the jails of both countries. But what has disappointed New Delhi is Islamabad’s failure to adhere to the timeline it had committed itself to for “full normalisation” of Pakistan’s trade relation with India.

Pakistan on April 14 last committed that it would to completely phase out its negative list for trade with India by December 2012 and thus grant its neighbour the status of Most Favoured Nation to do business with.

Pakistan’s Commerce Minister Makhdoom Mohammad Amin Fahim made the commitment to his Indian counterpart Anand Sharma during a visit to New Delhi. The joint statement issued after the meeting between the two Commerce Ministers had also reflected Pakistan’s commitment to normalise and strengthen bilateral trade ties.

The year 2012 however came to its end on Monday without Pakistan granting the MFN status to India.

Fahim recently told media persons in Karachi that the process of phasing out the negative list for trade with India and granting the MFN status to it had been “delayed for a short time”. He cited the concerns over protection of the interests of farmers and local manufacturers of Pakistan as the reason for delaying the process to grant India the MFN status.

Several anti-India radical organisations in Pakistan like Jamat-ud-Dawa and Difa-e-Pakistan strongly opposed Islamabad’s plan to designate India as the MFN.


Organisations representing farmers and manufacturers also joined the clamour in Pakistan against granting the MFN status to India.

Fahim also called up Sharma recently to update him on the efforts being made by Pakistan to normalise the trade ties with India. He said that Pakistan was on course to remove bottlenecks in bilateral trade with India. India and Pakistan had continued to recognise each other as the MFN from 1947 to 1965.

Though India had restored the same status for Pakistan in 1995, Islamabad had not reciprocated New Delhi’s gesture.

However, earlier this year, Pakistan moved closer to granting India the MFN status and shifted from a “positive list” to a “negative list” approach.