KARACHI, March 7: Although border trade is yet to start at Khokhrapar, businessmen and traders fear that it would be damaging for the local business interests as cheap Indian products would flood local markets.

The Khokhrapar border opened last month to facilitate the local people who have to travel a long way to reach cities close to Munabao station, the last station inside India.

What worries businessmen in Karachi is the likely influx of cheaper Indian consumer goods. India being the second largest market of Asia has been producing goods on mass scale that slashes the cost of production to a level unmatchable in Pakistan.

However, some businessmen hold another view. Raees Tarmohammad, a well-known commercial trader and head of several trade bodies, said the chances of dumping or flooding of Indian items were slim.

He said that in the absence of required infrastructure there was little possibility of marked difference in quantum of two way trade. He added that better roads, transport system, water, electricity and other basic requirements were needed for trade to flourish.

He said that a truck of goods from Munabao for Karachi would cost more than what it cost from Lahore. He also pointed out that lack of security from Tharparkar to Karachi was another serious problem.

He said business required protection and acquiring of private security system would simply increase the cost of business to prohibitive level. He believed that the smuggling or business would remain limited to the local people of Thar and adjacent areas. He felt there was no chance of the impact to reach Karachi at least for now.

Traders said that China had created difficulties for European and American manufacturers by exporting goods at a price that western economies cannot match, and India was doing the same in this region including Middle East. They said Pakistani consumer products would receive first hit and the cottage industry would suffer huge losses and may be pushed out of the market.

Some of the key Indian manufacturing hubs are located close to Munabao which is also a source of concern for the Pakistani businessmen.

“Ahmedabad is just 100 miles from Munabao, Soorat is 150 miles from Ahmedabad and Mumbai is 150 miles from Soorat which means that influx of industrial products is much easier from this side as compared to Wagah border,” said Abdus Sattar Balagamwala, a seasoned businessman and former chairman of Karachi Cotton Association.

He said that many smart Indian businessmen were stationed close to the Pakistani border. He said that Marwari, Gujrati, Soorti, Juna Garhi, Mumbai tycoons all had access to Pakistani market through Khokhrapar.

He said that readymade garments, soaps, toothpastes, medicines, chocolates, biscuits, wooden products, artificial jewellery, tobacco products, food items, electronic items, steel products, spare parts of motor vehicles, toys, and other essential consumer products would soon start reaching Karachi.

He said that the businessmen in rural Sindh had strong relations across the border. The ties would be facilitated with opening of border but this closer interaction could hit the local industry, he added.

Most of the businessmen in Karachi dealing in consumables were found concerned as they felt that cheap Indian products would not allow them to any space in the market. They said that multinational companies which were earning high profits in Pakistan could afford to slash their prices to survive but the small and medium enterprises might have to wrap up their activities.

They said that influx of goods from Amritsar was not as feasible for high transport charges. But the Khokhrapar border would open a floodgate to the Indian products.

Mr Asghar, an importer of plastic granules, said his margin would improve as he would be able to import raw material at much lower rates from Khokhrapar, however, the plastic industry would suffer because the Indian plastic goods were much cheaper.

He said that the same was true for packaging industry which would face difficulties as in India the sector was much efficient. Asghar said that the penetration of cheap Indian products in the local market could accentuate the problem of joblessness.

He said that the Indian products were 25 to 70 per cent cheaper especially medicines and herbal, homeopathic products etc., could sweep the local market. Indian medicines are already available in Pakistani markets but in limited quantity.