ISLAMABAD, Feb 24: Pakistan and India are likely to start talks on a preferential trade arrangement (PTA) after receiving the reports of sub-groups constituted recently on customs cooperation, trade facilitation and non-tariff barriers (NTBs).

Well-placed sources told Dawn on Thursday that the proposal of PTA came from the Indian government, and they wanted to formally discuss during the first meeting of the Joint Study Group (JSG) headed by commerce secretaries of the two countries held in New Delhi recently.

Besides, the sources said that an amicable solution of the un-resolved Baglihar Dam issue would also come up during talks on the PTA. According to the sources, Pakistan also wanted to know now in details about the tariff and non-tariff barriers, which restricted Pakistan's export to Indian markets before going for any liberalising trade with India despite having MFN status.

Elaborating further, the sources said that Pakistan could ensure at preferential tariff greater market access under the PTA with India for its exports of products mainly included- cotton yarn, fabrics, towels, leather products, surgical goods, sports goods, fruits, vegetables and pulses

The Indian on the other hand were eying to explore markets at concessional duty rates for its products in Pakistan mainly included-Information Technology related products, engineering goods, pharmaceutical products, entertainment related products, auto parts, iron and steel products and cosmetics products.

The products of the two countries, which were in competition in the international markets mainly included leather garments, carpets, ready made garments, rice, etc. On the other hand, the sources said, it was possible that Indian origin goods might get its way through Sri Lanka to Pakistan.

Pakistan and Sri Lanka had already signed free trade agreement (FTA), which allowed movement of goods at zero rate duty plus reduced import duty on all goods excluding some items under the negative lists.

According to the sources, the Indian exporters would now possibly divert their destination from Dubai to Colombo for its onward movement to Pakistan, which would be a big threat to the local industries.

The Indians have also made huge joint investments in Sri Lanka, who would now export their products to Pakistan at concessional or zero rate of duty. The sources said how it could be screened and controlled under the FTA that the products imported from Sri Lank was locally manufactured or just assembled or only carry the logo name of "made in Sri Lanka".

This was an issue which needs an early attention of the senior commerce trade wizards before the treaty was operationalized between the two countries.