India Nudges Pakistan On Mfn Status

India on Friday urged Pakistan to grant it most favoured nation status (MFN), a call for trade preference that was echoed by a visiting Pakistani business team. The call for India was made by Arvind Mehta, joint secretary in the commerce ministry, and for Pakistan by a business delegation to the annual India International Trade Fair in New Delhi.



Both Mehta and the members of the Pakistani delegation were speaking at a seminar organised by the Federation of Indian Chambers of Commerce and Industry (Ficci) in the capital.



Trade between the countries climbed to $2.6 billion in 2012-13 from $275 million in 2009-10, Mehta said. India’s main exports to Pakistan include oil meal, chemicals, rubber and petroleum, while imports include cement, gypsum and dry fruits.



Commerce was seen as the driver of the peace process that was renewed in 2011 after the freeze caused by the 2008 Mumbai terror attack. The renewed process notched up a few achievements in the arena of trade — India announced it would, in principle, allow foreign direct investment (FDI) from Pakistan, and both sides opened a new checkpoint at a land crossing in northern Punjab to accelerate commerce.



This could happen because of the strong backing provided by the commerce ministers of India and Pakistan, Mehta said, adding that for trade to grow, it should be insulated from tensions in other facets of the India-Pakistan relationship. “If we want traction we should not be hostage to what happens at the LoC (Line of Control),” said Mehta. Two Indian soldiers were beheaded in January and another five killed in an ambush in August. Pakistan, too, said its soldiers were killed at the LoC, causing the resumed peace process to stall.



For trade to progress, “there should be an uninterrupted and irreversible dialogue process. That is the only way out,” Mehta said. “Non-discriminatory access should be given (to Indian products)... we still need to translate our intent into policy actions.”



Mehta pointed out that Pakistan was uniquely placed for trading with India. “There is no country in the world (that’s a member of the World Trade Organisation, or WTO ) which does not give non-discriminatory access (to a WTO member),” Mehta said referring to Pakistan not giving India MFN status — something that was agreed would happen by December 2012.



The change in government in Pakistan earlier this year, with the election of the business-friendly Nawaz Sharif-led government, raised hopes of India being given MFN status, but the situation has remained unchanged.



“If Pakistan grants non-discriminatory access to India, India will provide a reciprocal market access to Pakistan at a 0-5% duty rate, similar to what is being given to Bangladesh. Pakistan should recognize that by delaying non-discriminatory access to India, it is losing out to Bangladesh,” Mehta said.



In the case of Bangladesh, India’s largest trade partner in South Asia, Mehta said, India had reduced tariffs on many items because there was no question of Bangladesh holding back on granting India MFN status.



“The Indian ready-made garment market size is about $30 billion and in the next 4-5 years, it will touch $100 billion,” Mehta said, adding that Pakistan would lose out on this huge slice of the market if it doesn’t give India MFN soon.



Zubair Ahmed Malik, president of the Federation of Pakistan Chambers of Commerce and Industry, supported Mehta’s call. “MFN status must be given to India — this is what I am urging to our government,” Malik said. “We want to see the trade flourish between the two countries and it can flourish if there will be a free movement of people, and for that, visa regime should be eased by both the governments,” he added, referring to a liberalized visa regime for businessmen implemented from this year.



Under the new rules, Indian and Pakistani businessmen will get one-year multiple entry visas and will be exempt from reporting to the police while travelling.



Naeem Anwar, minister-trade, at the Pakistan high commission in New Delhi, said Pakistan missed the December deadline for granting MFN status to India due to concerns raised by some sections in his country.



He added that Pakistan had completed an internal consultation process and hoped negotiations will resume soon. “Other points should also be opened for trade. New points will help in boosting trade,” Anwar said.



Source:- livemint.com