A TRUCKLOAD of Pakistan’s famous cotton suits for women, imported by an Indian trader, arrived in Amritsar through Attari border on May 24.
This was for the first time that women’s dresses had been imported through Attari border which shows that the land route had become the first choice of traders, due to improved infrastructure and facilities for trade, according to the Times of India.
Pakistan’s fine fabric known as lawn is extremely popular among Indian women. In fact, Indian women outnumber Pakistani customers in foreign outlets where these lawns are on sale. Pakistani shalwar suits have gained recognition in India for they are available in trendy styles.
In April, the four-day Lifestyle Pakistan Exhibition held in Delhi with over 100 top brands and designer dresses from Pakistan was a major hit with Indian fashion lovers. The exhibition hall was dominated mainly by textiles, mostly catering to feminine tastes, and had dress materials ranging from synthetics to chiffons, georgettes and silks.
The Pakistani fabric was sold like a hot cake although it was quite expensive, not because the price was too high. The Indian government had imposed 27.5 per cent cumulative import duty and then there were hidden costs due to non-tariff barriers. It is because of these factors that the Pakistani lawn has not so far been able to enter the Indian market formally.
Traders hope things would improve once Indian government removes NTBs. A Pakistani trader said at the exhibition that “where politics has failed, even cricket has failed, we hope fashion will open barriers between the two nations.”
But India’s NTBs, as it looks, would not go unless Pakistan confers most-favoured nation status on it. And that is scheduled to happen in December if all goes well. Pakistan’s commerce secretary Zafar Mahmood,( now transferred), told Reuters on the eve of the Lifestyle Exhibition that Pakistani businessmen still believe they are being unfairly treated.
Ahead of the fair, an Indian government official talked proudly to Reuters of how India had granted visas to more than 600 Pakistanis to promote products ranging from furniture to kebabs.
But the exhibitors complained that protectionism has made it too hard for them to do business in India. Normal duties in the world are five to 10 per cent on textiles. In India they are 27.5 per cent.
There is no such discrimination in other countries where Pakistani fabrics are given entry simply on showing certification of any internationally accredited laboratory indicating safe use of colour dyes.
However, the Indian authorities insist that each colour should be tested by an Indian lab which takes much time and whose fee is too high.
As a result, small quantities of over 100 colours are sent by air to Delhi, where each test for each colour costs about three thousand Pakistani rupees.
An exporter complains that cost of these NTBs comes to near four lakh Pakistani rupees per consignment of fabrics sent for lab test to New Delhi. Indians also demand that 20 yards of fabric from each of the 100 colour prints intended to be shipped to India should also be sent.
Then, there is slow custom clearance of goods being shipped across the border. Once lawn suits are in India for sale, there comes the problem of shop rents. In New Delhi, the rents are as high as in Dubai; agent also charges substantial fee. All this makes Pakistani fabric very expensive in India. It is the popularity and quality of these lawn suits that they still find ready customers in the Indian market.
The testing and certification requirement known as OEKOTEX and SGS is mandatory for all imports of ‘fabrics’ and ‘garments’ into India.
Indian authorities do not accept certification reports from certain labs and demand reports from their own labs. The European Union is learnt to have already reported this matter to the relevant committee on NTBs at the WTO. Similarly, Imports of ‘fruits’ and ‘vegetables’ in India are subjected to quarantine rules and also require a permit from its foreign trade ministry.
The Bureau of Indian Standards (BIS) certification, though cumbersome and expensive, is a requirement of the Indian government for all countries and is valid for one year. The renewal is done in three to four weeks but in case of Pakistani companies exporting cement to India, it takes more than six months – a non-tariff barrier.
Then, there is lack of necessary space at Wahga border on Indian side where only two trucks can be parked for loading or unloading at a time while 30-40 trucks can be handled at a time on Pakistani side. Hence, exporting through trucks is not a convenient option. And in case of rain damage to imported goods is imminent. Demurrage charges are also excessive in India.
Meanwhile, Indian media has reported that direct export of fashion jewellery made of precious metals and stones to Pakistan is likely to begin in a couple of months. Despite similarities in culture, ethnicity and choices in this regard, the annual indirect jewellery trade between the two countries stood at Rs885 million in 2011-12.
While India exported cut and polished diamonds and jewellery worth Rs870 million, such imports into India were worth just about Rs15 million. Since there is no direct access to each other’s markets, trade takes place via Dubai , Sri Lanka and other Asian countries. A 12-member Indian delegation led by Sanjay Kothari, vice-chairman of the apex trade body, the Gems & Jewellery Export Promotion Council (GJEPC), visited Pakistan from June 7 to 12 and met traders and retailers.
While Pakistan, where a lot of Indian cuts and designs are widely appreciated, would be a new destination for India’s jewellery exports, for India the import of some classic colour gemstones from Pakistan would become easier.
Pakistan’s jewellery market is estimated at $12 billion, while India’s annual jewellery exports are $32-33 billion. About nine-tenths of all the diamonds mined in the world are processed in India. Cutting and polishing of Pakistani colour gemstones would help growth in India’s manufacturing sector to some extent.