The suspension of PIA flights to Sri Lanka, which were started in 2011 with much fanfare, has disappointed members of business community including betel leaf, and drug traders and tour operators. Considered lucrative and productive by them, these flights were suspended in 2012 and the new summer schedule issued by the national carrier as no mention as to whether these flights would be resumed, notwithstanding the fact that PIA enjoys traffic rights to that country.
Pakistan's business community had shown concern when PIA suspended the flights as many business groups including some cement manufacturers were contemplating to establish factories in Sri Lanka. Suspension of flights has caused a great disruption in their business plans. The only alternate available option is Sri Lanka airline but it is not convenient time wise while the other option of travelling through Dubai consumes more time and money.
A trader at the betel leaf market (pan mandi) said there remains only one option for the traders and that is to bring betel leaf into the country through Sri Lanka Airline which charges heavily for cargo unlike PIA where the traders had arrangements with staff for taking medicines including Panadol, Ponstan, Calpol and Paracetamol while travelling from Pakistan and bringing in betel leaf from Sri Lanka in personal baggage.
Betel is grown all over Sri Lanka but the commercial production of export quality betel, with bigger leaves with dark green colour combined with thickness, known as "Kalu bulath" is significantly confined to few districts such as Kurunagala, Gampaha, Kegalle, Kalutara and Colombo. Large number of local betel accessions is grown in Sri Lanka. Among them "Maneru", "Ratadalu" and "Galdalu" are popular betel varieties with high export quality.
Sources at pan mandi said that Sri Lanka has been favoured as the trade talks with India, which is also a big producer of betel leaves, are at standstill and opening of Khokhrapar border trade is nowhere in sight.
Businessmen used to frequently travel with PIA flights to Sri Lanka but will be bound now to take carriers of different countries which would not only increase their expenses but divert revenues of the national flag carrier to other international airlines. Sources at customs department said that when PIA flight coming from Sri Lanka use to land at Karachi the whole arrival lounge used to get the soothing smell of betel leaf carried by traders as personal baggage in coconut leave baskets were spread all over the baggage belt while other airlines do not allow betel leaves to be carried in personal baggage and charge cargo fares which reduces the profit margins.
They said that to offset this additional cost traders carry medicine products made in Pakistan such as tablets strips in personal baggage. Due to understanding with different agencies including ANF, Customs and ASF these traders are not required to show any export document for Pakistani medicines rather they carried it as personal baggage.
Pakistan has a growing pharmaceutical industry. As of 2012, the total export value of Pakistani-manufactured medicines around the world stood at $400 million. Many different companies sell a diverse range of drugs and pharmaceutical products. However, trade through personal baggage is replacing official export of medicines from Pakistan.
The trend is seen especially in tablets where some of the low priced multinational products priced lower than a rupee are smuggled as the price difference in different countries like Bangladesh and Sri Lanka often results in huge profits.
Sources at Pharma industry confirmed that some of the products made in Pakistan by foreign companies are priced higher in neighbouring countries such as Augmentin 375mg is available in Pakistan at Rs 12.50 while in India it is available at Rs 60 if difference of exchange rate is calculated. Similarly Ponstan forte is available in Pakistan at Rs 1.88 per tablet and Rs 5-14 in India, Humulin N and R at Rs 49.50 in Pakistan and Rs 210 in India which gives huge incentive of profit if smuggled.
In addition to trade, tourism to these countries has largely been affected because a majority of Pakistanis fly with PIA to different cities of Thailand and Sri Lanka for spending vacations. The number of tourists is likely to be reduced from Pakistan to these countries because the fares of different airlines are exorbitant whereas availability of seats and directs flights will create further problems for them.