In right direction

In right direction

Talks between trade and commerce ministers of India and Pakistan, Anand Sharma and Makhdoom Amin Fahim, held in New Delhi this week, has made progress in some areas, though some outstanding issues still remain to be acted upon. Official level talks in April had prepared the ground for a meeting of ministers. Apart from the talks, the engagement included interaction between large business delegations of both countries.

The entire programme has underlined the importance both countries have attached to the need to improve mutual trade and business relations. Though this should have been the priority for the two neighbours, politics has affected the growth of commerce. That still is the case but there seems to be an effort to give more importance to trade and economic relations than in the past.

The ministers have set an ambitious target of more than doubling the trade volume from last year’s $ 2.3 billion to $ 6 billion by 2015. If normal trade channels are established this is easily achievable because the unofficial trade, through other countries and by illegal means, is much more than what the official figures suggest.

The steps announced after the talks, which include liberalisation of the business visa regime, lifting of the ban on bilateral investment, implementation of the South Asia Free Trade Agreement (Safta) norms and improving customs facilities, will help to increase trade volumes. There is a move to open branches of Indian banks in Pakistan and for Pakistani banks to open their branches in India. Pakistan will also lift the curbs on petroleum imports from India. India did well to announce that it would not oppose the European Union’s three-year tariff waiver for commodities from Pakistan, especially those from the areas affected by floods.

This was a major goodwill gesture.

A major disappointment was the failure of Pakistan to grant the Most Favoured Nation (MFN) status to India. India granted Pakistan the status in 1995 and has ever since been expecting Pakistan to reciprocate the measure. Though there have been reports that Pakistan has finally decided to do so, it seems to be still worried that its economy would be adversely affected by increased Indian imports. This is a wrong apprehension because improved trade and integration of economies will only benefit  both countries. Better economic relations will also help to promote political ties.

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