Indo-Pak trade normalisation dialogue to resume next week

Easing of political tensions set stage for meet alongside the Saarc event

As political tensions between India and Pakistan abate after a major military stand-off due to border tensions, New Delhi is planning to restart a trade normalisation dialogue with our neighbour.

Commerce secretaries of both countries would meet on January 16, on the sidelines of the Saarc Ministerial Meeting in Delhi. There would also be a Saarc Business Conclave, from January 17-18. The Pakistani delegation would be led by minister of state for commerce and textiles Khurram Dastgir Khan, who would be accompanied by commerce secretary Qasim M Niaz.

Commerce and Industry Minister Anand Sharma was apparently keen on resuming the dialogue to get the Most Favoured Nation trade status. Pakistan is yet to officially extend bilateral trade facilities under the MFN treatment — it was supposed to be done by December 2012.

A senior commerce department official told Business Standard: “We are going to obviously push for the MFN status. Besides, we have to also take stock of the progress of various committees that were formed, especially for the joint working groups on petroleum and power.”

Progress on the MFN front had slowed because Pakistan Prime Minister Nawaz Sharif was holding the commerce portfolio himself, said officials, leading to a delay.

Commerce secretaries of India and Pakistan had previously met in September 2012 to expedite talks, though it was initially decided that the commerce secretaries would meet every six months. Then, a new government under Sharif came to power in Pakistan. This delayed the talks. The situation was exacerbated by reports of ceasefire violations across the border.

With things looking up now, officials hinted that Pakistan might soon allow imports of some more goods, such as pharmaceuticals and agricultural items. Both sides would look into the matter of relaxing the business visa regime. The home ministry had approved such a proposal but the matter was pending in Pakistan’s interior ministry.

The negative list, which became operational from March 21 last year, contained 1,209 items that India cannot export to Pakistan, including pharmaceutical and agricultural products. India can now export around 7,500 items to its neighbour, up from 1,946 earlier. The positive list contained vegetables, meat products, animals, fruits, tea, spices, palm oil, crude oil, sugar, cotton and organic chemicals, among others.

Outgoing high commissioner of Pakistan Salman Bashir had recently said “improved trade relations with India is a priority for Pakistan”.

The dialogue to normalise trade with Pakistan started in 2011. Bilateral trade reached $2.5 billion last financial year, with a target of $6 billion this financial year. However, trade and business talks saw no progress for most of last year.

Later this month, New Delhi-based think tank ICRIER would organise the second annual conference on normalising India-Pakistan trade, to be attended by business people, academicians and trade experts from both countries.