The Hindu Business Line : India Inc hails initiatives to widen trade ties with Pak

THE Indian industry on Sunday welcomed the measures announced by India and Pakistan for strengthening the trade-ties including setting up of the Joint Business Council, and said the initiatives could boost bilateral trade to the tune of $5 billion by 2006.

Terming the setting up of the JBC as a `milestone' in the economic relation between India and Pakistan, the President of the Federation of Indian Export Organisations (FIEO), Mr O.P. Garg, said opening up of traditional transit route through Central Asia would give a boost to Indo-Pak trade and South Asia, Central Asia and Gulf.

He hoped that Pakistan would grant the `most favoured nation' (MFN) status to India and that the two countries would sign preferential tariff agreement shortly.

Mr Onkar S. Kanwar, President, FICCI, said the JBC should focus on four areas including opening up trade (exports) from India to Pakistan across a large number of sectors, which is at present limited to 768 items.

"Instead of a small positive list (768 items) which the Pakistan Government currently allows for trade, there should be a negative list from their side of sectors that they may wish to protect and all other sectors must open up for trade.

This has become a stepping-stone to the grant of MFN.

"Second, now that the Governments of India and Pakistan are supporting greater people-to-people interaction, it is time to open a few select sectors for joint ventures between the two countries which would increase employment and income opportunities and directly contribute to the greater industrialisation of Pakistan through Indian partners," the FICCI said.

Highlighting that infrastructure facilitation was critical for trade and investment to prosper, the FICCI said a road route through the Wagah Border through custom-bonded warehouses on either side of the border on the pattern of Indo-Bangladesh trans-shipment across Petrapole should multiply trade manifold.

FICCI said that the JBC should also focus on the trade in services, which can emerge as huge potential area.

"Already, the two countries are together committed to the South Asia Free Trade Agreement, which is due to start in 2006.

"Under the bilateral FTA, India and Pakistan can move faster towards a tariff free regime and together take advantage of third country's exports by enhancing competitiveness of core sectors," it added.

According to the Assocham President, Mr Mahendra K. Sanghi, the Commerce and Industry Ministers of the two countries should involve the participation of Indian industry in adequate numbers in the JBC. The governments of India and Pakistan should further intensify their talk to restore and set up transportation linkages by bus or railways between the agreed spots.

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