India and Pakistan keen to boost bilateral trade

NEW DELHI - India and Pakistan, suspicious neighbours and longtime enemies, are finally doing something right.

By Rajendra Bajpai

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Published: Fri 16 May 2003, 7:16 PM

Last updated: Wed 1 Apr 2015, 9:16 PM

The relations between the two countries are thawing slowly and both are planning to send business delegations across the border so that they can trade with each other directly.

Both the Federation of Indian Chambers of Commerce and Industries (FICCI) and Confederation of Indian Industries (CII) are planning to send business delegations to Pakistan as soon as relations between the two countries improve.

"We are working on it (sending delegation to Pakistan) but no dates have been finalised," said a spokesperson for CII. FICCI is doing the same thing.

The Pakistanis are equally keen to send a delegation to India but the two countries need to upgrade their relations first.

India and Pakistan do not have an ambassador in each other's capital. India withdrew its ambassador from Pakistan after an armed attack on the parliament house in New Delhi in December 2001.

India said they were Pakistani agents and Pakistan said India had given no evidence to prove the charge.

But relations between the two countries have shown signs of thawing lately. India has named its new ambassador to Pakistan and Islamabad is in the process of doing the same.

A delegation of Pakistani legislators is currently visiting India and the two countries are expected to begin official level talks next month.

"The bilateral trade between India and Pakistan should touch a high of $5 to $10 billion from the $200 million at present if the obstacles, which are existing at present, could be removed," the leader of the Pakistani delegation, Saleem Jan Mazari, said.

Both countries have embarked on the path of goodwill in the past few weeks and some results are beginning to show.

For instance, Pakistan has cleared 78 items that it had banned for importing from India. These include milk, cashew nuts, tamarind, groundnut oil, rubies, emeralds, sapphires and even tennis balls.

India's main exports to Pakistan are sugar, drugs, iron ore, spices and tea. The main imports from Pakistan are dry fruits, cotton yarn, lentils and spices.

But there is little direct trade between the two countries. Most of the Indian exports are from Dubai and Singapore.

Direct exports total about $200 million but export through third countries is estimated at $1 billion.

Most of the direct exports to Pakistan are through a train services that is irregular. In fact, it is so irregular and undependable that an Indian exporter found that his consignment of cement had turned to concrete by the time it reached Pakistan.

One Indian company, Apollo Tyres, is hoping transport services between the two countries normalise so that it is able to export tyres directly to Pakistan.

Nearly 35 per cent of Apollo's exports are to Pakistan but through third countries.

"We want to change this and make a major part of our exports through the direct route," said PPS Prasad, head of Apollo International's tyre division.

At present India and Pakistan have no air links, and passenger train and bus services have been suspended. But things are moving fast and many of the services are expected to be restored within weeks.

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