Pakistan is not calling it the MFN status anymore: Sunil Kant Munjal

Interview with Chairman, Hero Corporate Service Ltd

The first meeting of the Pakistan India Joint Business Forum (PIJBF) was held at the Serena Hotel in Islamabad on June 29. The Indian side was headed by Sunil Kant Munjal, chairman of Hero Corporate Service Ltd. In an interview with Nayanima Basu, he elaborated what both sides discussed during the meeting, their interaction with Prime Minister Nawaz Sharif and the road ahead. Excerpts:

This was the first formal meeting of private sectors from the two sides. How did it go?
This (PIJBF) is a private sector-led body which has been notified by both governments. This is unlike any other body. We are here to do some real stuff and come out with real results. We have to get something done here. And, we have the political will backing us. So, we have set up for ourselves some real benchmarks, with tough policy actions. In the first meeting itself, we decided the date for the next meeting, which shows that work is being done and when we meet next on September 5-6, we will have concrete results.

Do both sides really want to open up? Somehow, one always gets a feeling that this is all words and no play.
Yes. Unlike earlier, the business sentiment there was much more open this time. They understand now that trade with India will benefit them more. They are gradually realising that a preferential trading arrangement with India will help them prosper. They realise that trade and investment can be that bridge which can join the overheated borders. We cannot afford to be alienated any more. India also now knows that it needs a prosperous neighbour. We also have to temper our expectations.

I understand the Indian delegation also got the chance to meet Prime Minister (PM) Nawaz Sharif, who is also currently handling the commerce minister's portfolio. How did it go?
The meeting with PM Sharif was very encouraging. The meeting went on for almost one and a half hours, during which he told us how Pakistan is facing an acute power shortage and wanted India's help in that area the most. I think India should also look seriously at supplying power to them. This can be a major confidence building measure.

What was their response on granting MFN (Most-Favoured Nation) trade status to India?
Well, they are not calling it the 'Most-Favoured Nation' (MFN) status anymore for obvious reasons. They are now calling it "non-discriminatory market access" status. Several studies by Pakistani think-tanks also point to the fact that granting us MFN will bring immediate benefits to their economy. For example textiles is one of their main items of interest. India imposes high tariffs on this sector currently. This will automatically reduce once MFN is granted.

You said the next meeting is on September 5-6. Have you decided on the future roadmap for the PIJBF?
Both sides agreed the best way forward would be the formation of sectoral task forces. Each would have co-chairs representing the two countries. We also decided that the membership of the task forces would not be limited to the members of the Joint Forum but also include sector experts from both countries. The task forces would also be free to invite subject matter experts or others to participate in any part of the discussions and meetings wherever beneficial for the subject at hand.

What will these task forces do?
There will be a two-pronged strategy in terms of cost advantage and subsidy advantage. The task force on cost advantage will include automobiles, textiles, sugar, cement and other such sectors. Subsidy advantage will include agriculture. Based on this, we have identified 10 areas where the task forces will be formed. These are agriculture, automotive and engineering, chemical and petrochemicals, infrastructure, pharmaceuticals, information technology, textiles, education and vocational training, health care and,finally, dispute resolution and trade facilitation. We are going to come out with a report on the outcomes of all these task forces before the end of this year. We have kept banking and finance, cement and energy as areas where immediate follow-up is required.

What about the visa issue? Business cannot flourish without travel.
Well, I believe when there is political consciousness this should not be a problem since the visa issue has been resolved with both sides now granting multiple entry visas for one year. What is missing is the ability to travel. We need to increase the frequency of flights from both sides and permit private carriers to operate. We need to open more border posts. We need banking branches for transactions to happen. We need at least two banks on each sides from both countries for smooth business.

How and who will ensure the progress of work of these task force?
This will be looked after by the respective secretariats. The Confederation of Indian Industry (CII) and the Pakistan Business Council (PBC) would serve as the secretariats in their respective countries for the forum.

Did you urge them to open some sectors in which they have restricted India's entry, such as automobiles and textiles?
Clearly, these are the concern areas. I believe this is more a problem of perception than anything else. It was agreed that task forces on certain areas would be activated immediately, since the issues covered by these task forces were of a sensitive nature. These will include agriculture and agri-products, automotive and engineering, textile and textile made-ups and pharmaceuticals. The other task forces would also be activated.

I understand PM Sharif stressed for greater cooperation in the area of power.
As I said, we perceive this as a positive gesture from India's part towards its neighbours. There is active engagement in this area. We are trying to review technical solutions to this and take the shorter route. So, we are planning to move fast on this. The plan is to resume the power line from Amritsar to Lahore. We can initially start supplying them two to three megawatts. Technical work at the Amritsar grid is yet to start. We are also banking heavily on the TAPI (Turkmenistan-Afghanistan-Pakistan-India) pipeline.

What about your own company? Did you not ask for more opening in the auto sector?
This is a service I am doing for the nation. I did not go there keeping my company in mind.