ISLAMABAD: Trade liberalisation with India looks heading for more brainstorming when the federal cabinet takes up the issue on Wednesday.
Two federal ministries, which have a crucial say in framing a strategy to protect domestic manufacturers, do not agree with the negative list and a period of nine months the commerce ministry has proposed before completely opening the Pakistani market to the subsidised industries of India, according to official sources.
While the ministry of industries wants the negative list to be increased from 636 to 1297 items, the more important textiles industry ministry in effect says “no liberalisation for five years with India”.
The cabinet will take a final decision, but the key ministries were not in agreement on the complete phasing out of the negative list by end of this year, along with a shorter list, till the filing of this story.
A senior official in the textile industry told Dawn that the ministry, which is the custodian of more than 50 per cent export-led industries of Pakistan, had not provided any input in the negative list of the commerce ministry.
The commerce ministry has just included 77 items in the negative list, while there are 921 textile items which more or less needed protection, the official contended. “We have not been taken on board even before the commerce ministry made a commitment with the Indian government”, the official said.
At the same time, the roadmap for trade liberalisation with India was approved by the cabinet meeting in October last year.
However, the official said the approval was given on a presentation of the commerce ministry in which the relevant stakeholders’ ministries were not consulted about the contents of the presentation.
The official said as per rules the cabinet could not give approval on a presentation but only on a proper summary. This summary should be consulted with relevant stakeholders 15 days before its submission to the cabinet meeting.
Contrary to this, the official said, the commerce ministry had also committed to reducing customs duty to zero and five per cent on most of its importable items from South Asian countries, including India under the South Asia Free Trade Agreement (Safta) from January next year.
If the government approves the shorter negative list, the official said, it could mean that 80 per cent items would be imported to Pakistan on zero to five per cent duty from India.
This will lead to a deindustrialisation in Pakistan as there were shortages of energy for the industrial sector, along with high cost of doing business.
On the other hand, the commerce ministry was working on the summary till late Tuesday night, which will be presented to the cabinet for approval.
The summary on important issues should have been shared with the relevant stakeholders at least a week ago before submitting to the cabinet meeting, the official said, adding that it was not possible for the textile industry to be part of such decision which was not carried out on proper consultation.
On the other hand, the ministry of industry has finalised a negative list of 1297 items. It said that despite the negative list, an additional 3,575 items would be importable from India.
So the total importable items from India will reach 5,511 after finalisation of the negative list.
These will be in addition to the current 1,936 items which were imported from India under the positive list.
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