ISLAMABAD, June 2: The Planning Commission has favoured Pakistan’s trade with India, stating that there are several advantages of normalising trade between the two countries.

The Annual Plan 2012-13 says that the advantage of geographical proximity — cheaper transportation costs and trade complementarily in goods in which either country has a comparative advantage -- are overwhelming.The shorter distance will render it unnecessary for industry to carry high levels of inventories of raw material, intermediate goods and parts, thereby reducing cost of operations.

The plan lists benefits of enhanced trade with neighbours, including structuring commercial arrangements to underpin the proposed TAPI gas pipeline between Turkmenistan, Afghanistan, Pakistan and India, development of Central Asia-South Asia Regional Electricity Market (CASA-1000 regional transmission line between Afghanistan, Pakistan Kyrgyz Republic and Tajikistan), the signing of the Afghanistan-Pakistan Trade and Transit Agreement; completion of development of Gwadar Port by China and its commercial operation by a leading port operator from Singapore.

The Annual Plan 2012-13 aims to maintain a sustainable balance of payments position to ensure macroeconomic stability.

Pakistan has a high degree of dependence on oil imports, essential industrial raw material and machinery and equipment, and to meet the requirements without excessive reliance on external borrowing, there was a need for a robust export growth strategy.

The current account balance also needs to be improved by attracting private transfers, especially workers’ remittances.

The capital account would be strengthened by attracting various sources of financing with greater recourse to non-debt, creating stable and sustainable sources of financing, such as foreign direct investment.


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