To overcome a major obstacle in bilateral trade, Pakistan and India on Wednesday decided to take a giant leap forward and develop an institutional framework that would allow opening bank branches in each other’s countries on reciprocal basis.
Addressing a joint press conference with his Pakistani host and counterpart Makhdoom Amin Fahim, Indian Commerce Minister Anand Sharma said the Reserve Bank of India will be hosting a delegation of the State Bank of Pakistan to discuss opening bank branches and devising an institutional framework. “Once this takes place the economic engagement and concentration will increase”, he added.
When asked about the timeline for finalising the framework between the two central banks, he said both the banks will be meeting in the first fortnight of March in Mumbai. Both the countries also plan to hold the next round of parleys on expanding economic cooperation during the next month. “We are building bridges of understanding as this is the time for economic engagement for positivity, prosperity and stability in the region,” he added. Speaking on the occasion, the Pakistani commerce minister said the talks between the two countries
were progressing and the issue of converting the positive list to negative list would be completed by the end of the current month. “I don’t think there will be any problem in this regard,” he said.
Sharma said the issue of visa regulations was discussed during the talks and it was decided that the regulations will be revised to facilitate the flow of people, especially the businessmen, to promote bilateral trade. The two countries also initiated three agreements on cooperation in customs, mutual recognition of each other’s certifications and redressing each other’s trade grievances that will help build confidence of the business community on both sides. The implementation of these agreements the two countries will systematically address the issues related to Non-Tariff Barriers on which the Pakistani businessmen have serious concerns.
The Indian minister termed the finalisation of these agreements a significant development, adding that once implemented they will help allay the fears of Pakistani businessmen “who would be gaining access to a market of 1.2 billion Indian people”. According to the joint statement issued after the talks between the two commerce ministers, the two sides firmly reiterated to scrupulously adhere to the roadmap drawn up by the commerce secretaries for full normalisation of trade relations. It was agreed that Pakistan will move from a positive list to a small negative list by February 2012. The timing for the phasing out of the negative list will be announced at a time when the list is notified. It is expected that the phasing out will be completed before the end of 2012.
The understanding is that when the transition to MFN is completed, all items other than those in the South Asian Free Trade Agreement (SAFTA) sensitive list would get preferential access at a peak tariff level of 5 percent by the end of 2012. The commerce secretaries also agreed to advance the preferential trading arrangement agenda through SAFTA. This will be done in a sequenced manner. Tariff liberalisation for up to 30 percent of the sensitive list will be considered by India within four months of notification of the small negative list by Pakistan.