Non Tariff Barriers hampering Pakistan’s exports to India

Though India continues to demand the Most Favorite Nation (MFN) status to have enhanced trade with Pakistan; it has not removed the Non-Tariff Barriers (NTBs) despite repeated demands by Islamabad. Pakistan which is reluctant to give the MFN status to India, wants first to remove the technical hindrances, which are called NTBs. Despite enjoying the MFN status given by Delhi, Islamabad has not benefited from the facility due to, what experts claim as non-tariff measures employed by the Indian Government at a multilateral level. Despite of giving the MFN status to Pakistan, the Indian side is yet to address other issues which create hurdles for Pakistani exports into the neighboring country. The barriers are mostly concerned with the infrastructural issues at port of entry, bureaucratic and administrative mishandling, psychological barriers emanating from our bilateral political issues, visa restrictions and surveillance of visitors to India, banking restrictions, investment restrictions and restrictive trade routes, which constitute the real Pakistan specific non – tariff barriers.
According to a study, following NTBs were identified:
The Bureau of Indian Standards (BIS) Certification requirement for products like ‘cement’ though being cumbersome and expensive in nature, is a requirement of the Indian Government across the board for all countries and has a validity of one year. The stipulated period of certification procedures for renewal is between 3 to 4 weeks. But in the case of Pakistani companies exporting Cement to India, it has taken more than 6 months. (Source: M/S DG Khan Cement, L/S Lafarge and M/S Lucky Cement).
The OEKOTEX and SGS testing and certification requirement is mandatory for all imports of ‘fabrics’ and ‘garments’ into India and therefore Pakistani exporters are subjected to the same. In certain cases the Indian authorities have been known to not accept lab reports from certain labs. Some cases have been reported by not only Pakistani exporters but also by some European Union (EU) exporters as well. In fact the EU has already reported this to the relevant Committee on NTBs at the WTO.
Imports of ‘fruits’ and ‘vegetables’ in India are subjected to Quarantine rules and also require an Import Permit from the Director General of Foreign Trade, Government of India. This too is an across the board requirement for all countries.
There are testing requirement for all imports of leather and leather products into India and SGS is an acceptable agency for such testing and certification. Finished Leather has an added certification requirement from the Veterinary Department of India.
There is lack of infrastructure on Indian side of border at Wahga where only two trucks can be ported for loading or unloading at a time while 30-40 trucks can be handled at a time on Pakistan’s side. As a result, exporting through trucks is not the preferred mode because in case of rain, and with no covered area available for customer clearance, damage to imported goods is imminent. Demurrage charges are excessive in India. A 10-hour window is given to importer to off-load for custom clearance and then re-load to local transport. The activity of off-loading, custom clearance, and reloading never transpires within the 10 hours and as a result the importer almost always pays demurrage charges. No trade through container loads is allowed.
There is no warehousing facility on either side of the border. There is no cold storage facility available at the border, even though perishables are very often traded. Trade only takes place between 9:00 am and 3:00 pm, after which the gates are closed.
There are several bottlenecks on the rail route, such as the unavailability of necessary equipment including rail wagons, rakes etc. and insufficient infrastructure, such as custom house agents, sheds and weighing and x ray machines. Furthermore; Inter-change between Pakistan and Indian Railways takes place only on Sundays; at least for Soda Ash, this inhibits flexibility and trade volume.
No cargo trains are allowed through the Sindh route, even though a considerable amount was spent on widening the gauge of tracks. If this route is opened, it will save a huge amount of freight on both sides as ocean freight to shipping lines which takes almost ten days for loading and unloading. Whereas, trains would allow cargo to reach dry ports within 24 hours at lower handling cost.
Currently there is no direct banking arrangement between the two countries. The payments are made either by informal channels or through an international bank using third country banking channels. This increases cost due to additional service charges and longer time consumed on such transactions.
The biggest NTB in promotion of Pakistan’s exports is; India’s Pakistan – specific visa regime. The business visa regime is unpredictable, city specific and limited to very few days stay with single entry. Encouragingly, for the first time a process of dialogue has been initiated between the Interior Secretaries of the two countries to seriously consider proposals from both sides in order to facilitate business travel. The Indian security regime for Pakistani goods and passengers has also been identified as a major NTB which results in harassment of travelers as well as delay in clearance of goods. According to sources the NBTs were mostly created by the ‘mind set’ of the particular administrative officials in dealing with Pakistan specific consignments. The mindset which stems from the hostile political relations between the two countries was still a big hurdle in the way of improving bilateral trade during the last 60 years. However, the joint statement issued at the conclusion of the 5th round of talks on Commercial and Economic Cooperation between the commerce secretaries of India and Pakistan, held on 27 -28 April 2011 in Islamabad was clearly showing a commitment to remove the technical hindrance of trade, sources claimed.