Indo-Pak bilateral trade can increase to USD 8 bn
Bangalore: Opening up of the integrated checkpost at Attari-Wagah border and Pakistan`s granting Most Favoured Nation (MFN) status to India can increase bilateral trade to USD eight billion a year in the next two years from the current level of USD 2.6 billion, according to a study released today by industry chamber ASSOCHAM.
Islamabad has committed to bury the negative list of 1,209 items by the end of this year and move to a regime that is in line with WTO rules. "This is a very welcome step towards reduction of barriers to bilateral trade," said The Associated Chambers of Commerce and Industry of India (ASSOCHAM) in a study `The Potential of Indo-Pak Economic Engagement in Post-MFN Scenario.`
"The decision to move towards a negative list approach will go a long way in saving time and costs incurred by third country trade route that encompasses in almost 20,000 items, which could otherwise follow the bilateral route," said ASSOCHAM president Rajkumar Dhoot while releasing the study.
Nearly 6,000 items can now be imported into Pakistan from India as against less than 2,000 items earlier. India granted MFN status to Pakistan in 1996 but Islamabad agreed to a time-frame of granting the MFN status to India during commerce minister Anand Sharma`s visit in February.
The two countries will soon open up an integrated check post at Attari-Wagah border which will raise the number of trucks crossing the border to about 600 from the current 150 and ease visa rules for business travel. The issues figured in talks between prime minister Manmohan Singh and Pakistan president Asif Ali Zardari on April 8.
Pakistan has expressed willingness to give India transit facilities for trade with Afghanistan and Iran especially in energy and infrastructure projects.
India has developed high competitiveness in the services sector. Based on qualitative and quantitative analyses,several areas with potential for cooperation in the near future have been identified. They are: petroleum products, iron and steel, pharmaceuticals, chemicals, automobiles, heavy industries, electricity trade, small and medium enterprises, IT and IT-enabled services, telecommunications, transportation and financial services.
"Integrated check posts with faster customs clearance facilities need to be established to normalise trade relations," said Dhoot in a statement. "The establishment of a joint business council and a joint study group can be supportive to the process of trade normalisation."
Informal trade between India and Pakistan via third countries like the United Arab Emirates (mainly Dubai), Singapore and Hong Kong is estimated at USD five to seven billion. Legalisation of trade is expected to reduce costs and increase government revenue by collecting duties on imports, said Dhoot.