Commerce Secretary Zafar Mehmood has expressed apprehension over the ongoing Indo-Pak talks, saying that these may prove unproductive if the Indian authorities did not communicate positive posture over the issue of EU trade concessions. He was speaking at a seminar on 'Pakistan-India Trade Prospects and Challenges', organised by the FPCCI at a hotel here on Monday.
He said that after the unprecedented floods, the declaration passed by EU nations to provide trade concessions to Pakistan have not materialised because of Indian reservations. He said the talks between Pakistan and India have been restarted after Mumbai incident but the same might remain unfruitful unless the Indian government positively reacts to EU trade concessions to Pakistan.
He said the Indian government should facilitate its business entrepreneurs to extend business relations with Pakistan, and added that the Indian businessmen are expressing fear to make business relations with their Pakistani counterparts because of unfriendly Indian government policies.
He said the Indo-Pakistan relations should be stretched at same degree as it has reciprocal effects, urging the Indian authorities to lift non-tariff barriers to convince the Pakistani authorities for grant of 'most favoured nation' (MFN) status to them. He recommended to the authorities concerned to extend visa limit of Saarc members from 100 to 10,000, besides evolving a comprehensive roadmap to materialise the understandings made during Indo-Pak talks.
Earlier, asood Alam Rizvi, secretary general of FPCCI in the address of welcome expressed hope that the talks between Commerce Secretaries of Pakistan and India would be fruitful for the business fraternities of both countries. SM Munir, chairman of India-Pakistan Chamber of Commerce and Industry (IPCCI), said that there was a lot of scare in the business community of India after the Mumbai incident of November 2008, resulting in complete halt of the economic activities between the two countries.
However, the situation is now improving after the 5th round of talks on commercial and economic co-operation between Commerce Secretaries of India and Pakistan. He said that India and Pakistan together account for nearly 80 percent of the GDP of Saarc countries. The opportunities for furthering trade and investment are profound, and virtually untapped, he added.
He said the Indo-Pak trade remains to continue at the lowest level, and added that after Mumbai incident, the trade between these countries declined by 60 percent in 2009-10, with the overall trade falling from $2 billion to $900 million. At present, Pakistan accounts for less than 1 percent of India's trade, while India accounts for less than 5 percent of Pakistan's trade, Munir added.
Pakistan and India are presently exchanging goods to the tune of $13 billion per annum through non-traditional sources like cross border smuggling and personal baggage. He said that the joint statement was signed between the two countries at a meeting held at Islamabad on April 27-28. Following the said development, a working group was established to reduce the tariff and non tariff barriers (NTBs) which would help Pakistan to increase its exports to India. He said that it has also been decided to have only negative list, instead of positive list.
Tariq Saeed, vice president of CACCI, said that although India is striving to become economical giant, the same could not be possible without having fine relations with neighbouring countries. He said that both countries, which are presently sharing only 25 percent of its market potential because of hostile business environment, should consider in line to transform South Asia as global economic hub.
To support the Ministry of Commerce in its negotiations with Indian counterparts, the Trade Development Authority of Pakistan (TDAP) has undertaken an in-depth and extensive analysis with the stakeholders regarding the issues pertaining to bilateral trade with India which showed a number of issues faced by Pakistani exporters relating to infrastructural issues at port of entry, bureaucratic and administrative sluggishness and mishandling, visa restrictions and surveillance of visitors to India, overall restrictive environment relating to banking investment and logistical trade routes, chief executive of TDAP, Tariq Iqbal Puri, said. He said that these substantial barriers to bilateral trade needed to be worked out in earnest with sincerity and unwavering commitment.
He said the authority had proposed a comprehensive program for trade promotional activities in India with the objective to familiarise the Indian consumer and industry about the availability of tradable products and services from Pakistan and vice versa.
He said the TDAP had suggested to the authorities to hold the Life Style Pakistan Exhibition in the major cities of India in November, 2011, besides participating in the major sector-specific international exhibitions in India.
Puri said that TDAP has planned to set up business forums for the young entrepreneurs of the two countries to focus on bilateral trade and economic relations. The TDAP chief offered to the Indian businessmen to propose plans to the TDAP for trade promotions in Pakistan and assured full governmental support in this connection.
Dr Ishrat Hussain, Dean of IBA in his recommendations emphasised on the government of Pakistan to grant MFN status to India while the India government should reduce its tariffs on agriculture commodities, textiles and other goods. He said that both countries should reactivate SAFTA and agree on phasing out of the sensitive list over next few years. A restrictive list would nullify all the potential gains of preferential trade access, he added.
Moreover, he said that non-tariff barriers including technical barriers to trade (TBT), sanitary and phyto anitary measures (SPS) should be rationalised and simplified. He said that trade facilitation through expeditious border crossings, streamlining documentation requirements, border agency co-ordination, opening of new border crossings, quick customs clearance, electronic data interchange, telecommunication, improved transport links, shipping protocols and easing visa restrictions for businessmen should be carried out immediately.
He said the agreement, which was signed by both countries for opening of branches by two Indian banks in Pakistan and two Pakistani banks in India in 2005, should be implemented as devoid of banking services, opening of letters of credit, cross border transactions of funds, trade could not be taken place.
He said that both countries have to substitute neutral policies with domestic tax, tariff and subsidy policies that distort incentives for production and trade. He said the agenda of composite dialogue of 2006 including resumption of rail service between Khokhrapar via Monabao, bus service between Srinagar and Muzaffarabad, religious visits to Lahore and Nankana Sahib, new shipping protocol, deregulation of air services and joint registration of basmati rice should also be revisited.
The President of FPCCI, Ghulam Ali, said the Federation has always played vital role to bring both business communities closer with the aim to enhance bilateral trade to $6 billion. Later, Dr Rajiv Kumar, Secretary-General of Federation of Indian Chambers of Commerce & Industry (FICCI), said the authorities have to identify the causes which hamper economic activities between the two countries.
He said the egoistic approaches, which restricted the progress of both countries for years, should now be taken out to maintain strong bilateral relations at certain level. He said the incumbent government has adopted the 'Doctrine of Gujral' and now the environment in India has changed, adding that the Indian government has now realised the significance of good relations with South Asian countries. Dr Rajiv said the decision of Indian authorities to reject EU trade concessions to Pakistan in WTO forum was forcibly made to facilitate their businessmen.
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