India has been denying that she is using non-tariff barriers (NTBs) to curb imports from Pakistan. But a small quantity of 5000 tons cement exported from Pakistan was briefly detained at Nhava Shava port near Mumbai, by the Indian authorities apparently for want of a `quality and standard certification’ from the Indian Bureau of Standards (IBS).

The threat by Pakistani exporters to divert the cargo to Dubai port finally persuaded the Indians to send IBS officials to the port for piecemeal clearance of the cargo..

Presently, India is facing acute shortage of wheat and cement while Pakistan is well placed to meet the shortfall in both of these commodities. If India does not use NTBs to discourage imports of these two commodities from Pakistan it could help narrow the persistent and widening trade gap in her favour. Last year, the two-way trade stood at $1.3 billion but exports from Pakistan accounted for only for twenty per cent of the overall volume.

India’s current needs are estimated at around three million tons of wheat. And the Indian government has recently removed duties to facilitate imports to meet domestic demand. On the other

hand, Pakistan is expecting a bumper wheat crop of around 23- 24 million tons and after meeting domestic consumption of around 20 million tons, it would be left with a huge exportable surplus of over four million tons . It has also sizeable carry-over stocks from last season.

Similarly, there is a surplus cement production of around six million tons out of the total production of around 30 million tons per annum. Presently 19 cement units are operating and by June this year, another three million tons of cement capacity is expected to be added. Around 22 million tons of cement is consumed in the local market while around two million tons are being annually exported to Afghanistan.

The question however is: have the policy makers made any plan to take full advantage of huge surpluses in these bulk commodities to earn much needed foreign exchange to reduce the yawning trade deficit:? And has the Trade Development Authority of Pakistan (TDAP) been assigned with the task of facilitating exports of these two commodities?

Exporters and manufacturers of these two commodities are tapping foreign as well as Indian markets but without any governmental support and guidance. Some exporters have also shipped around 5000 tons of wheat to India on trial basis. Though the shipment has not yet reached Indian ports, exporters suspect that it may be rejected on some flimsy grounds including higher contents of foreign matter (edible and non-edible). Pakistani wheat normally has one to 1.5 per cent contents of foreign elements but is free from Kernel Bunt disease which is globally considered to be an Indian infection.

. The Indian intiial move to detain Pakistani cement is against Article-8 of South Asia Free Trade Agreement (Safta) under which the contracting Saarc members are bound to provide trade facilitation for mutual trade. A pertinent clause of this article is: “harmonisation of standards, reciprocal recognition of tests and accreditation of testing laboratories of contracting states and certification of products.”

In case, stipulated measures under Safta are not adopted by the Saarc states, there are other options available and which are also in vogue worldwide to facilitate trade between both countries. For ensuring quality and standards, pre-shipment inspection companies are operating and they could also be used by India for imports from Pakistan.

A US study has also given critical appraisal over Indian technical barriers to trade (mandatory standards) and stated that India has enforced mandatory certification for 109 products, down from over 150 products some time back. The mandatory quality certification covers a wide range of products e.g. various food items, food colours, cements etc. Imports of these items are allowed only after Bureau of Indian Standards (BIS) certification and permission to use the BIS mark.

The study further discloses that for certification of these 109 items detailed requirements have been issued under seven different Acts. It is a general complaint that the Indian government publishes Tariff, Additional Tax Rates and Notifications but there is no single official publication that covers all information on tariffs, fees and tax rates as well as the legislations under which formalities are to be completed.

All these are given in different Acts and all Acts have detailed Rules. Most of the requirements emanate from these Rules. This makes the whole system very cumbersome, time-consuming and even confusing. . Hence, there is a total lack of transparency. The standards specified are in many cases stricter than the international standards.

During a recent visit of a 10-member delegation from PHD Chamber of Commerce and Industry (oldest chamber of India) ,its President Mr Bhatia disclosed that there is also a demand of around three million tons of wheat in India. In a meeting with FPCCI the Indian delegation was informed about huge trade imbalance between the two countries and the NTBs issue also came under discussion. An executive member of Saarc Chamber of Commerce, Amjad Rafi told the delegation that time has come that India should remove NTBs and let Pakistani cement and wheat find its way in Indian market to improve bilateral trade imbalance..

But Indian diplomats always respond to Pakistan’s criticism of NTB by raising the issue of Pakistan not giving India Most Favoured Nation (MFN) status despite the worsening adverse trade imbalance against Pakistan. During a recent conference of Saarc chamber on Safta held in Bhurban, the Indian diplomat raised the issue of MFN status and was critical of Pakistan for not implementing SAFTA in letter and spirit.

But Pakistan gives the same treatment to Indian goods as to imports from any other country. All Indian goods at the entry points are treated at par with other imports originating from around the globe. And items in the positive list of 1078 items are allowed to be imported from India without any hurdles or technical barriers.

As a matter of fact, Indian goods not allowed for import reach Pakistani markets through third countries and according to private estimates, the volume of this informal trade is to the tune of $2 billion. During first three months (Jan to March), the official trade volume between both the countries reached $500 million mark and if the momentum is maintained for rest of the year, it would mean that the total trade could touch $2 billion by the end of 2007. But how long can Pakistan sustain widening imbalances in trade with its big neighbour protecting its huge market with non- tariff barriers?