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Restricted items for trade with India being finalised

February 21, 2012

The Indian side said a 30 per cent reduction in its sensitive list would be announced four months after Pakistan’s notification of the negative list. - File photo

ISLAMABAD: In what appears to be the last round of consultations on opening border for Indian goods, the ministry of commerce on Monday kicked off crucial consultations with relevant ministries/departments to finalise the proposed restricted items to be placed on negative list for a brief period as part of trade liberalisation with India.

“The ministry of commerce will end the whole consultation process within one week,” a senior official in the ministry of commerce told Dawn on Monday requesting anonymity.

As consultation ended, the official said the summary would be submitted to the cabinet by the end of February, a self-imposed deadline that Islamabad assured to a 120-member trade delegation, led by Indian Commerce Minister Anand Sharma last week.

A source in the commerce ministry said that the whole machinery of the ministry was working on one agenda item — to get through the proposed summary from the next cabinet meeting that was seeking change of decades old trade regime with arch rival India in the sub-continent.

The ministry of commerce proposed opening of Pakistani market for additional 2,000 items that will be importable from India after the cabinet gave final nod to the negative list.

Currently, 1,946 items were already allowed for import from India, which were placed on the positive list.

Initially, the source said that the commerce ministry has worked out a negative list of 636 items, which will not be allowed for trade with India.

This list may go up slightly to please few stakeholders who want protections against Indian imports, the source added.

As per proposed plan of the commerce ministry, the source said that the negative list will be completely phased out in three quarters.

So the whole exercise of formulating a negative list will be for a period of just nine months, the source said.

According to the source, the ministry of commerce was striving hard to completely phase out the negative list by end December 2012.

“We want to adhere to this deadline,” the official said who is familiar with the proposal.

The phasing out of negative list will culminate automatically into granting of most-favoured nation (MFN) status to India. As a result, Indians will do trade on 6,500 items with Pakistan without any restrictions.

But the official said, it was up to the cabinet whether to approve this blanket liberalisation with India or not.

Going by original proposal, Indians will be able to export automobiles, pharmaceuticals, textile products etc to Pakistani market.

The source said that it would be difficult for the government backtracking on the trade liberalisation proposal, as Pakistan’s secretary commerce and commerce minister had already committed to Indian government during their last visits the phasing out of the negative list as well.

At the same time, India linked trade facilitation under the South Asian Free Trade Area (Safta) to Pakistan’s commitment at bilateral level and Safta sensitive list to Pakistan’s negative list.Pakistan has already made a 20 per cent reduction in the sensitive list under Safta.

The Indian side said a 30 per cent reduction in its sensitive list would be announced four months after Pakistan’s notification of the negative list. Further liberalisation of the sensitive list would follow abolition of the negative list.