While considering the restoration of various bordering routes for enhancing trade which is seemingly a continuation of yet not concluded dialogues for granting the Most Favored Nation (MFN) status to India, the government is ignoring the dilemmas and problems of local industries.
The PML (N) led government has indicated development towards revisiting trade ties with India as the leaders of the both countries have expressed their interest to facilitate traders of India and Pakistan on Wahga border and in resumption of railway from Khokhrapar-Munabao border.
According to sources in local industries, despite granting the MFN status to Pakistan, the imposition of several non-tariff barriers (NTBs) denies access to many Pakistani brands and products in the Indian market regardless of high quality of production and their prevailing demand in the industrial and domestic sections of India.
Moreover, these complicated NTBs have stopped Pakistan from realising the true potential of the MFN as it continues to fail to penetrate its products in the Indian market. Whereas India, even without having the MFN status, enjoys much more free environment as the positive list is increasing day by day which is evident in the trade imbalance of the two countries.
According to statistics, Pakistan’s export to India was $ 288 million in 2004-2005, while it was $ 264 million in 2010-2011, a decline of 8 percent while India’s export in 2004-2005 to Pakistan was US $ 547 million and US $ 1743 million in 2010-2011, an increase of 218 percent.
Sectors like cement, salt, farm products and textile have established their repute in Indian market but these products have not been given access by the Indian authorities although the concern traders have committed orders of handsome values to enhance trade. However, products relating to these sector could be beneficial to India as in addition to growth and expansion in the neighboring country, billions of dollars could be saved on yearly basis if Pakistan is considered as a substitute instead of importing these products from different countries at much higher rates.
The Indian government and industrialists in these sectors have effectively blocked market access using strong arm tactics and interpreting WTO rules to protect their domestic industry. Hundreds of complaints have been lodged against India in the WTO by developed countries, which are still under review, what chance will Pakistan have of achieving exports where we have advantage?
Necessary capacity, effective bilateral negotiation is the need of the hour. The way MFN was to be granted on Jan 1, 2013, it would have killed the domestic industry. Now is the time to put forward the best mind in industry, the civil service and the foreign office to put together a vision and step-by-step approach that leads to not only enhanced imports but also increased exports. The agenda of these talks should be set not IFIS or Indian side but by Pakistani stakeholders in industry and government.
