India mulling liberal visa regime for Pakistani businessmen

India is preparing a comprehensive list of Pakistani businessmen who would be granted multiple visas to ensure smooth travel between both countries, as one of its first steps to remove the barriers to trade. A joint task force under the ministry of home affairs is also examining the possibility of visa exemption for some of the selected businessmen from Pakistan who would meet prescribed criteria.

Pakistan has demanded greater access to Indian markets and removal of various restrictions that obstruct smooth flow of trade, in order to grant India the most favoured nation (MFN) status.

A central bank experts committee would also be constituted soon. It will have representatives from the Reserve Bank of India (RBI), State Bank of Pakistan and National Bank of Pakistan. Currently, the application proposal of the United Bank of Pakistan to set up branches in India is pending, while the State Bank of India (SBI) has only expressed its intent to set up its facility in Pakistan. At present, all paperwork and transactions are routed through third-party banks based in New York.

The committee on banks will also examine the issue of facilitating inflow of investments from Pakistan to India, which is currently prohibited.

“The MFN would be granted once India removes the various non-tariff barriers that acts as major irritants to bilateral trade. At present, there is no smoothness at all. While India has granted the MFN status to Pakistan, it has never opened the markets for us. On the other hand, Pakistan has opened its markets for India but did not grant MFN,” a senior Pakistani government official told Business Standard on the condition of anonymity.

The proposal to ease the visa regime for Pakistani businessmen would be discussed next month when a committee on non-tariff barriers would meet. Pakistan had earlier stated it would grant the MFN status to India by October. The matter would also be debated during the upcoming meeting of commerce ministers of both countries. Earlier this month, Anand Sharma extended a formal invitation to his Pakistani counterpar, Makhdoom Amin Fahim, but there has been no official confirmation. This will coincide with the meeting of both commerce secretaries — Rahul Khullar and Zafar Mahmood — as well.

“Pakistani businessmen do not feel comfortable doing business here. Most of the time, their visa applications get rejected after several months of waiting, without any reason. Then, even they get the visa, they get access for less number of cities than required,” the official said.

The problems are mainly faced by the owners of small and medium enterprises who do not have the wherewithal to bypass police verification, is mandatory upon arrival in India. It entails a tedious process of filling forms and examination of a number of documents, resulting in wastage of time and money. More, Pakistani consignments reaching Indian shores have to undergo a rigorous process of checking. The samples are taken to labs in Kolkata all the way from Mumbai.

Textiles and products of agro-based industries are the main items of trade. Some of the main items include cement, soda ash, chemicals, cotton, rock salt, tea and jute. In 2010-11, India’s export to Pakistan topped $1.6 billion compared to Pakistan’s export to India at $275 million.