KARACHI, Feb 18: The ratification of South Asia Free Trade Agreement (Safta) by the federal cabinet coupled with resumption of train service between Pakistan and India via Sindh-Rajhastan border this week is a big leap forward towards more trade and economic relationship between the two countries.
Business leaders and Indo-Pak watchers are convinced that trade between the two countries is bound to improve further in the coming days, despite how the commerce minister Humayun Akhtar has qualified the cabinet ratification of Safta — that it does not mean Pakistan is giving a Most Favoured Nation (MFN) status to India. Granting the MFN status has been linked with resolution of bilateral political issues mainly, the lingering Kashmir dispute.
“Safta is a regional trade agreement and granting the MFN status is a bilateral arrangement”, the minister is quoted to have said early this week in Islamabad. At present, India and Pakistan are trading on a positive list of items which, according to Raees Ashraf Tar Mohammad, leader of the Pakistan Grocery Importers Group, is more than enough.
“We imported virtually everything from India that was felt short in our market during last more than one year,” Raees said. During last more than one year Pakistan imported pulses, vegetables, live animals and now sugar. The government allowed duty free import of these items after shortages were noticed in the domestic market and there was a fear of public outcry.
“The import of live animals has been discontinued by importers in Pakistan as quarantine conditions were proving too expensive for them,”, Raees disclosed.
The businessmen looking for increasing trade opportunities and better economic relationship between Pakistan and India are upbeat on an announcement made by Pakistan’s Oil and Gas minister in New Delhi only a day ago that India would be allowed to bid for privatization of oil and gas assets in Pakistan.
Tata, a big name on South Asian business map, is already in Pakistan tea market through a London based company. There are reports that quite a many Indian investors are eyeing Pakistan’s oil and gas assets.
At least eight Pakistani IT companies are associated with Indians who are working in the upcoming IT city near Hyderabad Deccan. This city now employs about 27,000 engineers, technicians and operators and this number will go up to 200,000 by the year 2008.
India offers bright prospects for marketing of Pakistan media products that include television dramas, Urdu publications and a whole range of other allied products. With 160 million Muslims plus a large number of Urdu knowing Hindus and Sikhs and the fact Urdu is an official language in several Indian states, the Indian market has virtually unlimited prospects for Pakistan’s media products.
Exchange of media products between India and Pakistan can be done under a bilateral arrangement and within the Safta framework. The South Asia Free Media Association (SAFMA) has proposed unrestricted cross border movement of media persons and media products in the SAARC member countries. This proposal has been accepted, in principle, at the highest level of SAARC and now awaits ratification by the individual member governments.
Also adding to optimism are reports of shipping licence having been issued to a company to launch a ferry service between Mumbai and Karachi, expected signing of a new shipping protocol and opening of two bank branches in each other’s country.
Raees said that the resumption of train service between Munabao-Khokhrapar will contribute towards generation of business activities on a limited scale as basic infra-structure like customs, banking and warehousing are yet to be set up on either side of the border.
The overland trade between Pakistan and India has resumed recently via Wagah and is bound to give a big boost to Lahore and other industrial centres of Punjab to meet the growing demands of East Punjab, Haryana and Madhiya Pardesh.
The traders now hope for opening of Sialkot border which would also give a big boost to trade.
Pakistan and India at present, trade through small launches and a formal shipping protocol will facilitate operation of ships between the ports of the two countries and also to carry and bring cargo from and to other countries of the world.
Instead of a positive list of trade maintained by India and Pakistan the businessmen want a common negative list of such items which would give them a much more wide area of operation.