After Pakistan’s decision to award most favoured nation (MFN) status to India by December 31st, businessmen and traders of Indian Punjab are anxiously waiting to get transit access to Afghanistan and entire Central Asia through Pakistan. Indo-Pak trade experts point out that India had recently initiated talks to get land route access through Pakistan, Afghanistan, Iran, Central Asian Republics (CARs) and Caucasian sea and three countries having already signed agreements. Countries except Pakistan and Afghanistan had already started a process to tie several loose ends related interconnectivity and customs, they underscored. They states that Indian Punjab businessmen believe that if these routes become operational, Punjab would again emerge as manufacturing hub for heavy machines, tools, pharmaceuticals, agriculture implements and textiles. It would help reviving Indian Punjab hosiery industry that compromised its share after free trade agreements with Sri Lanka in early 1980s and Bangladesh recently. They estimate that current trade between the two countries might touch $15-16 billion, if figures of legal, illegal and trade via Dubai or other countries are accumulated. They believe that non-tariff barriers (NTBs) on both sides of the border are main obstacles in liberalising trade between the two neighbours.
Experts point out that refusal of trade through land route is one example as out of 1,963 tariff lines only 14 items are allowed to cross border through land route. Only this barrier increases the cost of freight by over 233 per cent. Despite inefficient infrastructure at Customs Stations at Wagha Border, a 20-foot container crosses border through land route at $300 whereas the same costs more than $1,000 if diverted through sea route, they estimate. A cement exporter discloses that Pakistani cement has huge demand in Indian markets due to its premium quality. But, Pakistani exporters are facing great difficulty in enhancing cement exports with India. Not only Indian port authorities but also Indian bureaucracy and cement industry is creating hurdles in the way of Pakistani exports. He lamented that Pakistani exporters had to bribe Indian Railways officials and contractors to get their wagons unloaded.
In a recent conference, Professor Sajal Mathur from Delhi-based Centre for WTO Studies indicated that transit route was one of the components of the WTO-mandated MFN status to all the countries, but in case of India and Pakistan both countries were looking towards transit access with fingers crossed. However, it might not be mandatory for both countries and Afghanistan as it was not a member of WTO. Indian business community believes that if transit route is allowed, Indian Punjab will get back its pre-partition glory as not only Indian Punjab would become industrial hub but also it will get higher revenue receipts, promotion of trade and even manufacturing to feed Pakistan, Afghanistan and Central Asian States, which are witnessing a double-digit growth.
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