MFN or not, trade with Pak 'abysmally' low, says Assocham

Amid reports that India is considering withdrawal of most favoured nation (MFN) status to Pakistan in the wake of the Uri terror attack, Assocham on Sunday said the special privilege has not made much of a difference as trade between the two remains “abysmally” low.

Of India's total merchandise trade of $641 billion in 2015-16, Pakistan accounted for a meagre $2.67 billion.

India's exports to the neighbouring country worked out to $2.17 billion, or 0.83 per cent, of the total Indian outward shipments while imports were less than $500 million, or 0.13 per cent, of the total inward shipments.

“In all, trade with Pakistan was equivalent to 0.41 per cent of India's global merchandise commerce,” said D S Rawat, secretary general of Assocham. “Thus, the MFN status or no MFN has not made much of a difference on the bilateral trade. While India has granted Pakistan the MFN status, Islamabad had not responded... even with the MFN status, Pakistan's exports to India remained less than half a billion dollars.”

He said that for political reasons, the businesses have not been showing interest in each other. “Going forward, as things stand today, almost no movement is seen in the immediate future. Even the symbolic presence of Pakistan exhibitors at the annual India International Trade Fair (IITF) in November in New Delhi is not expected, whether or not formal ties are snapped or not, given the present state of affairs,” said Rawat.

On its part, India Inc has come out in support of Prime Minister Narendra Modi for pushing India's interest, the industry body said, adding that strategic decisions are fully in the domain of the government.

Even as India was grappling with the global slowdown, its merchandise exports stood at $261 billion in 2015-16 while imports were $380 billion. India's main exports markets are the European Union, the US, Africa and the South-East Asia.