India’s Commerce Minister, Anand Sharma, is set to visit Pakistan, at the head of a large delegation of senior officials and top businessmen, reflecting the two traditionally hostile neighbours’ desire to normalise trade and economic relations.
At present, Pakistan allows exports to India but has an exclusive list of 1938 items that are officially allowed to be imported from India.
Led by industry chambers, India’s private sector has organised an ‘India Show’ in Lahore and Karachi—the first ever trade exhibition from India, with more than 100 exhibitors showcasing pharmaceuticals, textile, gems and jewellery, chemicals and petro-chemicals products.
The latest data shows that formal trade between India and Pakistan jumped from US$ 144 million in 2001 to US$ 2.7 billion. Informal trade, which includes third country trade, is estimated at US$ 10 billion.
“Recent initiatives to deepen and strengthen India-Pakistan economic relations are welcome,” J K Paper Managing Director Harsh Pati Singhania, “but more needs to be done. I believe it is possible to move towards the target of 10 billion US$ bilateral trade quickly, if we take the right steps. Steps that accelerate the implementation of most-favoured-nation and greater exchange of business delegations would help significantly towards this”.
The Indian government has undertaken a series of measures to increase bilateral trade. There is a move to open a second gate at the Attari-Wagah border, which should increase the number of trucks crossing the border from 150-200 to 500-600 daily. Both sides have also agreed on grid-connectivity between Amritsar and Lahore, paving the way for sales of up to 500 MW of power.
Trade normalisation would have an enormous positive spin off. After Pakistan sent the right signals, India now has to take the initiative.
At the same time, the normalisation of bilateral trade will help defuse political differences.