KARACHI: The South Asian Free Trade Area (Safta) agreement is unlikely to make a big impact on the informal trade between Pakistan and India. But many market players in Jodia bazaar are divided.
Some say informal trade will continue to thrive while others believe that Safta will shift business of about two billion dollars from informal to formal trade on an annual basis.
It is due to non-tariff barriers imposed by the two dominant countries of Saarc that the two billion dollar trade is being carried out through informal channels via third countries like Dubai, Singapore etc.
"The share of livestock arrivals from India is estimated at one billion dollar alone, out of total informal trade volume," Pakistan Commodity Traders Association (PCTA) Chairman Raees Ashraf Tarmohammad said, adding that goats and cows will continue to arrive through informal channels.
There is no denying that elimination of non-tariff barriers and cut in customs duty will help increase legal trade between India and Pakistan, besides enhancing customs revenues. "I think 70 per cent of the illegal trade will become legal with the liberalisation of free trade."
However, trade of livestock via informal channels and "done trade or carry trade" are likely to persist in future.
Indian Sarees, cosmetics, artificial jewellry, clothes are some of the items that find their way into Pakistan under the "done or carry trade" at the Boulton Market.
A number of shopkeepers, running "done trade" at Boulton Market, attract people destined to go to Bombay or Delhi to enter into a deal. The shopkeepers sell parcels containing synthetic cloth, dry fruits, shirts, trousers, T-shirts etc., to these people. The packets are available between the range of Rs5,000-50,000. Buyers are given phone numbers and addresses of businessmen in Bombay or Delhi who buy these items and pay in Indian currency.
When these people return, they bring Kaju, betel leaves, Sarees, artificial jewellry, cosmetics etc., in the same way and sell to the shopkeepers concerned.
At present, this kind of trade is continue at an average pace, a "done trade" shopkeeper said. Much depends on the political relations, free movement on rail, bus and air routes, which are improving.
The patron-in-chief, Pakistan Kiryana Merchants Association (PKMA), Haji Shafiqur Rehman, thinks that illegal trade will flourish under Safta in case passengers' outflow and inflow through rail and bus routes gain momentum. "You cannot check each and every item passengers carry. Currently, informal trade is still going on without any major hindrance," he said.
Indian items are gaining popularity among the masses not only in Pakistan but also in the Middle East due to their low prices. Pakistani products, despite having good quality, are failing to compete with Indian products because high cost of utilities and taxes play a leading role in raising their cost of production, he said, adding that India will attract more buyers under Safta as its products are cheap.
PCTA chief Raees Tarmohammad said consumers specially Pakistanis will turn out to be the main beneficiaries of free trade between the two countries.
He dispelled the impression that Pakistani industries will collapse. The two countries will discuss sensitive items' lists to adjust tariffs so that local industries could not face problems.