India Inc upset over Pak deferring trade-opening decision

The much-hyped visit of a high-profile business delegation led by Commerce Minister Anand Sharma today failed to get the Pakistan government clear hurdles in normalising trade and set itself on course to granting MFN status to India.

The Pakistan Cabinet deferred a key decision on switching to a negative list regime for trade with India after reservations from sections of the government and domestic industry.

The decision on the Commerce Ministry's proposal to finalise a negative list as part of measures to normalise trade relations with India was put off as "all stakeholders were not on board", Information Minister Firdous Ashiq Awan told a news conference.

The interior and textiles ministries were among the stakeholders which had expressed reservations.

Since enough homework had not been done on the proposal, Prime Minister Yousuf Raza Gilani had decided to defer the matter, she said.

An official statement said the cabinet meeting chaired by Gilani had "directed the Ministry of Commerce to consult all stakeholders before the preparation and finalisation" of the negative list.

However,the Cabinet gave its approval for signing agreements on cooperation in customs, mutual recognition of standards and for redressing trade grievances between the two sides.They will be signed tomorrow.

India Inc leaders, accompanying Sharma felt let down. "Yes, I am disappointed. There are some political reservations, that need to be resolved. Political will is very important to boost bilateral economic relations," CII President B Muthuraman said.

Sharma, who led the high-level business delegation on his three-day visit, declined to comment on today's development, stating, "Let me look at it in Islamabad tomorrow".

The delegation which arrived in Lahore yesterday, had meetings with business chambers in Karachi.

Ficci President R V Kanoria too expressed his disappointment. "It is sad because businessmen from both the countries are very enthusiastic about the economic relations. The Cabinet is not reflecting the true sentiments of businessmen of both the countries," he said.

Delay in finalisation of the negative trade list would also result in grant of the most favoured nation (MFN) status by Islamabad to New Delhi.

As per a mutual understanding in November last year, Pakistan was to allow in February 2012, import of all Indian goods, excepting a few items in the 'Negative List' giving boost to a paltry bilateral trade of $2.7 billion.

At present, Pakistan follows a 'positive list' regime and permits import of only about 1900 items from India, which gives almost full access to Pakistani goods.