Towards interdependence

Liberalising Indo-Pak visa regime welcome

The visit of External Affairs Minister S M Krishna to Pakistan has produced an agreement to liberalise the visa procedures for travellers between the two countries. While some of the processes will make pilgrimages and visits for tourism easier, much attention has focused, rightly, on the significant easing of restrictions on business travel. It has been reported that business visitors with an income of more than Rs 50 lakh or representing a business with a turnover of over Rs 30 crore will be eligible for a one-year multiple entry visa allowing them to visit up to 10 cities. In addition, the onerous requirement for most visitors, that they report their presence to the local police, has been eased for travellers on business visas. This is an important step forward for economic engagement. Business leaders on both sides of the border have frequently pointed to the difficulty, and sometimes even impossibility, of travel between the two neighbours as central to why India-Pakistan trade is well below its potential level.

From a foreign-policy standpoint, the announcement is of interest because it continues the solid progress that has been made on creating the conditions for deepened economic engagement. Pakistan’s foreign minister, Hina Rabbani Khar, explicitly stated that delinking these issues from the “core” concerns – Kashmir and national security – is a significant change. While India’s concerns on terrorist and other threats emerging from Pakistan continue to be important and worthy of constant attention, there is little doubt that creating a stable economic environment – and perhaps even economic interdependence – is essential for India’s long term security. Prime Minister Manmohan Singh and Pakistan President Asif Zardari faced considerable domestic opposition when their trade-enhancement agenda was revealed in April 2011, but in spite of the fact that both have considerably diminished political capital, their governments have moved forward steadily, pushed by the “Easter meeting” between the two leaders in April this year. In 2012 alone, Pakistan confirmed that India would receive Most Favoured Nation status by the end of the year; India allowed foreign direct investment from Pakistan across sectors; Pakistan moved from a positive list to a negative list for Indian imports; and now visa barriers, the most prominent non-tariff barrier to trade, have been substantially eased. In normalising trade with Pakistan, the stakes are high; it can increase probably 10, and perhaps 30 times. More, economic interdependence, even if core political disagreements remain, nevertheless reduces tensions significantly, as the example of India and China shows.

What will be important is that this new dispensation be seen as permanent and stable, and not as a bargaining chip to be removed from the table if security-related disagreements flare up again. Their purpose is to create a stable economic environment that empowers peace- and growth-seeking elements on both sides of the border. As such, they should not be rescinded in haste. Prime Minister Manmohan Singh has had little enough to point to as an achievement in his second term. Normal trade relations with Pakistan, and their calming effect on India’s troubled neighbourhood, therefore, should be a priority. He should not delay his visit to Pakistan for too long.