Indo-Pak entrepreneurs banking on each other

The traders and businessmen living across the border want the governments of India and Pakistan to accelerate the opening process of the banks and trade related companies on each other’s territory to give a sense of confidence to traders of the two countries.
“We would require presence of local banks on both the sides to give requisite confidence to importers and exporters,” Rafeeque Ahmed Meccam, president Federation of Indian Export Organizations (FIEO), told opening ceremony of the India Expo 2012 Friday.
Held here at Expo Centre by the FIEO in collaboration with Karachi Chamber of Commerce and Industry (KCCI), the exhibition was attended among other by Siraj Kassam Teli, chairman Businessmen Group and former president KCCI, as a chief guest.
“I would take this opportunity to request the concerned agencies to expedite the process of opening of branches of Pakistan banks in India and Indian banks in Pakistan,” he said. He said it was quite ironical that all South East Asian economies were striking FTAs with nations across Pacific and Atlantic but not amongst themselves.
Improved bilateral ties between India and Pakistan would give the necessary oxygen to South Asia Free Trade Zone which would open vistas of opportunities for countries of the region, he said.
The FIEO president said to enhance Indo-Pak bilateral trade, India Expo 2012 was only beginning of a long journey between FIEO and KCCI. He said he would like to reciprocate to nice gesture of Pakistani side by extending similar privilege to them in India.
He apprised that FIEO was an apex trade promotion body set up by the Ministry of Commerce to promote international trade having more than 14 offices in India and organizes more than 50 international exhibitions across the globe. FIEO board comprises Export Promotion Councils and Commodity Boards and represents in various committees of the Government in their decision making.
The FIEO president said India–Pakistan bilateral trade for the year 2011-12 was estimated at $ 2 billion. The balance of trade is favourable for the Indian side with $ 1.54 billion exports and imports at $ 400 million.
The recent official figure between April-October, 2012 places exports at $ 834 million, exhibiting a growth of about 1pc while imports during the same period increased to $ 333 million, showing a jump of 42pc from the corresponding period in 2011.
“We are looking forward for narrowing trade deficit with Pakistan,” he said adding “We are equally eager to increase our imports for that healthy balance of trade result in win-win situation for both the countries.”
The President FIEO stressed upon the need to diversify the trade from both the sides. India’s exports to Pakistan comprise 8-9 major products which contribute approximately 90% of the total export.
The main products exported from India to Pakistan are polymers, industrial chemicals, machinery, polyester fabric and yarn. Capital goods are the strength of India, and Pakistan is importing it from other countries, India should exploit this opportunity.
Most of the items in India are expensive in comparison to Pakistan so cheaper items can be sourced from Pakistan to avoid expensive imports from other countries. Both countries should try and explore to create synergies and not get overly competitive.
He highlighted that the infrastructure issues are hindering the growth of the trade between the two countries. The land route is most competitive as carrying a container through Wagah costs $ 391 while the same through Mumbai-Dubai-Karachi cost over $ 1000. “We need to provide better infrastructure to facilitate trade through the closest route,” he said.
He opined that multiple city and multiple entry visa regime would be introduced from January, 2013 which would be a big boost for bilateral trade. Ajay Sahai, Director General and CEO of FIEO, proposed that India and Pakistan should give preference to companies in each other’s countries for exports and imports if products can be supplied at competitive prices.
For example sugar can be exported from Pakistan to India which would help in softening sugar prices in the country while petroleum exporters from India could reduce the price of petroleum products in Pakistan by $ 14 per barrel giving a saving close to $ 2 billion for its economy.
On the occasion, Siraj Kassam Teli, chairman Businessmen Group and former president KCCI, stressed the need for creating new Indo-Pak trade synergies for regional economic integration.
Teli said once Indo-Pak business executed in a real sense, both the countries would be not dependent on other countries for economic cooperation.
Indo-Pak trade nexus would also activate intra-SAARC trade.