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India wants access for its exports

06 December, 2013

LAHORE: India wants unrestricted access to all its exports to Pakistani market through the land route as agreed between the two neighbours in the roadmap developed in September last year to increase bilateral trade.

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LAHORE: India wants unrestricted access to all its exports to Pakistani market through the land route as agreed between the two neighbours in the roadmap developed in September last year to increase bilateral trade.

Under the roadmap Pakistan had agreed to open up the land route for all items exported by India once New Delhi cuts the number of 836 items on its sensitive list (the items that are not allowed to be traded with Pakistan) by 30pc, Prem Chand Valeti, director (South Asia) at India's ministry of commerce, told a group of Pakistani journalists visiting the Integrated Check Post (ICP) at Attari earlier this week.

"We have implemented our part (of the agreement), but Pakistan is 'yet to' fulfill its promise," he said.

The document binds India to bring down the number of items on the sensitive list to 100 gradually in one year (from the date of finalisation of the roadmap) and Pakistan in five years.

The process has, however, been stalled because of Pakistan's reluctance to meet its part of the plan and open up land route for all exports from India.

Islamabad, which scrapped the positive list of items tradable with India to replace it with a much smaller negative list of un-tradable items following the resumption of the commerce secretary level trade talks in April 2011, is also yet to grant India the MFN (most favoured nation) status it had promised in the roadmap.

The official bilateral trade between Pakistan and India has surged 44pc to $2.6bn in the last two-and-a-half years.

Almost one-third of the total bilateral trade takes place through the land route. The rest takes place through rail and sea routes.

In the hope of normalisation of trade relations with Pakistan in the next few years, India has also developed a large, state-of-the-art ICP at Attari to facilitate increasing cargo and passenger traffic across the border.

Pakistan is yet to create the infrastructure to handle increased volume of trade reflected in the rise in the number of cargo trucks crossing the border to around 74,000 from 57,000 a year ago, according to the ICP officials.

The lack of sufficient trade infrastructure and restrictions on trade through the land route are not the only factors stalling rapid increase in trade volumes.

India's stringent quality standards, which form 95pc of non-tariff barriers (NTBs), and restrictions on free movement of cargo vehicles across the two countries are other major reasons curbing bilateral trade potential.

Valeti said the two issues were being taken care of under the banner of Safta (South Asia Free Trade Agreement).

"The draft of a motor vehicle agreement for free movement of vehicles across the Saarc nations is ready and circulated amongst the member states," he said.

He was hopeful that finalisation of the agreement would allow free movement of cargo vehicles across the Saarc member states.

"The agreement would allow a truck to start from Nepal and pass through India to unload its cargo at its final destination in Balochistan or elsewhere in Pakistan," he added.

But he was not sure when the agreement would be signed.

At present, Pakistani trucks are required to unload their cargo at Attari and Indian vehicles at Wagah. The cargo is then carried by local trucks to its final destination on both sides of the border.

The reservations of Pakistani businessmen about the strict quality standards hampering their access to Indian markets will be addressed in another 'harmonization of standards across Saarc nations' document that is being drafted under the Safta agreement.

"Once this agreement is drafted and agreed upon by the member states, it will remove what are considered NTBs (erected by India to limit imports from other Saarc nations including Pakistan).

Another major factor that is widely considered a major hurdle hampering bilateral trade between India and Pakistan is lack of 'containerized trade'.

Many Indian businessmen told this reporter during the one day stay in Amritsar that start of containerized trade would give significant boost to bilateral trade and help address the issue of smuggling across the border through cargo trucks and freight trains.

"We cannot export our newsprint to Pakistan, which can help bring down prices because containerized trade is not permitted," an executive of Khanna Paper Mills, which sent 75 tonnes of newsprint last year to Lahore on a trial basis, told Our Sources.

At present, Pakistan allows only 137 items to be traded through the only land trade route between the two countries.

Pakistan is pushing for non-tariff barriers (NTBs) constraining exports from this side of Wagah/Attari to ease before it comes up with a more committed effort to implementing the roadmap.

End.


 
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