T S Vishwanath: NDMA - One step forward...

By moving beyond the issue of Most Favoured Nation status, India and Pak have demonstrated a willingness to improve trade ties significantly

The India-Pakistan trade and investment initiatives follow a set pattern. At regular intervals, political leaders meet and commit to improving the economic partnership but within a few months the process is some times completely derailed, and at other times slowed down due to an incident that breaks the trust the two sides would have agreed to build.

The relationship has also been hit by the fact that there are several sceptics who are not keen on building a partnership since it could hurt their short-term political interests. However, there has been no dearth of both sides trying to put the relationship back on track.

The recent visit of the Pakistan Commerce Minister, Khurram Dastagir Khan, to Delhi for the South Asian Association for Regional Cooperation meeting and the bilateral he held with the Indian Commerce Minister Anand Sharma has yielded some good results that can help build a strong partnership across our western border.

The efforts this time are expected to yield better results since there has also been strong industry support on both sides over the last six to eight months when senior industry members have built platforms like the Joint Business Forum supported by industry associations such as the Confederation of Indian Industry and the Pakistan Business Council, to find a solution to the long-standing problem of building a sustainable bilateral trade and investment regime.

A strong industry push would help in political leaders understanding the need to keep the stakeholders involved in the process and heeding to their demands for building a viable partnership.

The approach of the two sides is looking more positive. Instead of sticking to the usual issue of waiting on the granting of Most Favoured Nation (MFN) status by Pakistan to India, the two sides have agreed to move ahead on a Non Discriminatory Market Access (NDMA), which in a way only falls very short of the usual trade nomenclature of MFN.

Rather than going by the literal meaning of MFN, the two sides have decided that going beyond this issue would further help the two countries engage bilaterally. NDMA, as the name suggests, will help achieve substantial market access, ensuring free flow of goods and people both the ways. According to the Pakistani Minister, "MFN status is a red herring now and it distracts the countries from the real issue which is non-discriminating access and a level playing field for both the countries". This proactive step can go a long way in building a strong economic partnership, if the two sides are able to sustain the dialogue without a break.

Further, the two sides have yet again agreed to intensify and accelerate the process of trade normalisation, liberalisation and facilitation and to implement the agreed measures before the end of February 2014.

There are several outstanding issues that the two sides decided to focus on. These include the need to expedite the process of issuing bank licences to allow banks to function in each others country, opening the Wagah-Attari border for trade at all times of the year and allowing more goods to be traded through that border, identifying steps to be taken to allow containers, which were until now unloaded at the checkpost and re-loaded on the other side to be moved right up to Amritsar and Lahore. And most importantly relaxing the visa regime. India, reportedly, agreed to to look into the matter of Pakistan's request for easier and higher quota for visas for its businesspeople.

The two sides have even decided to look at moving forward some technical issues by convening meetings of technical working groups of customs, railways, banking, standards organisations and energy. New Delhi and Islamabad are also keen on operationalisation and effective implementation of the three agreements signed in 2012, specifically aimed at reducing the non-tariff barriers: visa facilitation, customs facilitation and mutual recognition of standards.

The intent is good, but these decisions and discussions should not just remain on paper. There is now an urgent need for the two sides to move this forward to give the economy a boost. The two largest and most populous economies of south Asia should aim at moving forward and creating an economically powerful bilateral relationship. There is an urgent need for the two countries to look into creating political environment of peace, mutual trust and confidence.

The writer is Principal Adviser at APJ-SLG Law Offices