THINKING that I should know, someone asked me why I thought the Pakistan government has been so prompt and ready to give MFN status to India. Even though I know a few things about this issue, I was stumped.

Trying to figure out a credible answer, I thought of the eight ingredients of the Composite Dialogue initiated between India and Pakistan in 2004. No concession has been offered or hinted at by the Indians so far in any of the components. Not even for some easily doable ones, like the Sir Creek issue, to set the pace for improving relations.

Even some ‘softer’ gestures were all in the negative. For example, Pakistani cricketers continue to be banned in their IPL as ‘punishment’ for the Mumbai incident. The conciliatory and somewhat naïve initiative of the chairman PCB for starting India-Pakistan cricket was spurned. Recently, there was news of India refusing to send their hockey team for a tournament.

Even on the matter of trade, Indian’s track record has been somewhat enigmatic. They gave us the MFN in 1996, when their exports to us totalled $94.5m and ours to them $40.7m. We have not yet given them the MFN, so logically the balance of trade should have tilted in our favour over these years.

The facts, however, are that Indian exports to us in 2011 were $1,743m, an 18-fold increase, while our exports to them have gone up to $264.3m only, a six-time increase.

As for our exports to them, nothing is going to change with the current dialogue, since we already have the MFN status from them. The non-tariff barriers that Pakistan has been pointing out since 2004 when the Composite Dialogue was started are the main stumbling block, but Indian interlocutors shrug their shoulder every time it is mentioned.

No one is denying the benefits of trade, especially with a regional country which is likely to become an economic power. There will be a possible decrease in the import cost of some items due to reduced freight costs. There will be possible diversion of imports; what we currently import from China, (about $7.5m) could be imported from India. The import of Indian goods currently being done through Dubai will start coming directly, thus reducing costs.

All these advantages are on the import side. There is no plan by the government or the chambers on export to India. Indian businessmen overwhelmingly hold the perception that there is nothing Pakistan can export to them except gypsum and rock salt, and some agricultural products. This perception is neither refuted by our side, nor is there any concrete strategy. As a matter of fact the Ministry of Industries, whose role it is to safeguard and facilitate Pakistan industry, appears not to be in the loop on this issue.

There is a well-founded apprehension in some quarters that the influx of Indian goods and of Indian businessmen without reciprocity might lead to a backlash from extremists. A perfectly good opportunity could turn into a disaster. Even though Pakistan has announced the MFN status, there is still time to prepare for the paradigm shift in trade relations with our neighbour.

The non-tariff barriers that are so often pointed out to the Indians are never denied by them, but explained by saying that they apply equally to all countries. Anecdotal evidence refutes this narrative. Pakistan imports are given ‘special’ treatment by Indian customers, etc. There are reports of Indian importers being questioned by RAW. In any case, that argument does not help our industry.

There is a need for the government to prepare a list of items in which Pakistan has a competitive edge. It has to prepare lists of items where with its facilitation Pakistan can become competitive. It needs to commission studies to map the actual non-tariff barriers faced by Pakistani exporters.

These studies should have been done and publicised before signing the agreements. However, it is not too late. If such studies have been done, they should be made public. The relevant committee out of the three set up through the recent bilateral agreements should take up the issue of non-tariff barriers with Indians with time lines for removal.

There is no doubt that the current Ministry of Commerce led by an able secretary has been able to push the initiative of trade through a myriad of committees very competently and with a passion, so critically lacking in most of the bureaucracy these days. The easy part has been to give access to India. The difficult part is going to be to ensure that our textiles get a fair deal, our fans which outsell Indian fans internationally find a major market in India or for that matter our tractors, which are reported to be better in quality and cheaper because of the exchange rate advantage, are accepted by the Indians.

While Pakistani industry may not have the diversity of the Indian industry, it has the advantage of a much bigger market at its disposal. So if India sells 20 items worth a couple of billion dollars, for Pakistan even if two items are allowed by India to enter its market, they can get a market of half a billion because of the size of the Indian market and the exchange rate advantage.

Opening trade with India can only be sustained if in the public perception it enriches both countries. It will be foolish to let an opportunity turn into a disaster.

The writer is former secretary commerce.