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Indo-Pak trade: Indians happy, Pakistanis unclear

Industry captains said it would help if the Pakistan government makes the process of trade liberalisation more transparent.

, ET Bureau|
Updated: Feb 17, 2012, 03.22 AM IST
ISLAMABAD: The Pakistani industry seems divided over the immediate gains from normalizing trade ties with India. While the SMEs that dot the country are apprehensive of competition from established players in India, others believe competition will be a harbinger of development.

"There is a divide in the Pakistani business community," said Mian Mohammad Ateeq Sheikh of the Shalimar Group in Pakistan. "There are those who work in cartels and want to enjoy continued protection and then there are those who believe that competition will lead to development."

Sheikh said the SMEs have to understand that increased business with India will lead to transfer of technology. "This, in turn, will develop the home industry," he said.

In the joint statement issued after the meeting of commerce ministers from the two countries, Pakistan assured that it would switch over from a positive list of imports from India to a much shorter negative list by the end of this month. It also gave a commitment to lift the ban on all export items to India by granting it the most favoured nation status by the end of 2012. At present, Pakistan imports only 1,963 items from the country against about 9,000 items that it imports from other nations.

Some others from Pakistanbelieve that it is the timing of the decision, and not the decision itself, that is flawed.

"Pakistan is right now going through an energy crisis and therefore the business community is not comfortable with the idea of opening up just now," said Jawed Akhtar Bhatti, president of the Rawalpindi Chamber of Commerce and Industry. "If the dismantling of barriers is done over a longer period, they will feel more comfortable."

Industry captains said it would help if the Pakistan government makes the process of trade liberalisation more transparent.

"A number of sectors suffered a blow after Pakistan signed a FTA with China," said Munir Ahmed Tamoli from a Rawalpindi-based paper manufacturing company. "Some are scared that the same may happen in India's case. The government can build confidence by being more transparent."

The mood, however, was more upbeat in the Indian business delegation to Pakistan.
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