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Indo-Pak bilateral trade may reach $10b in 3 years

Pakistan and India bilateral trade is expected to reach $10 billion during the next three years, a top official said.

The Most Favoured Nation status to India and opening of bank branches by early next year will pave the way for direct trade between the neighbours and reduce the cost of import through third country.

“Bilateral trade may reach $6 billion mark within a year or two as the two nations act fast on easing visa rules, removing non-tariff barriers and reducing the negative list,” Tariq Puri, chief executive of Trade Development Authority of Pakistan, told Khaleej Times. Pakistan and India official bilateral trade stood firm around $2.7 billion and heavily tilted in New Delhi’s favour. The MFN status to India by year-end may prove the ‘game-changer’ that will drastically reduce illicit trade through third countries.

“The exchange of goods through third-country will drastically drop and cut the Pakistan import bill by 20 to 30 per cent because of reduction in import costs,” Puri said.

Pakistan’s federal cabinet approved a negative list of 1,209 for India, which will be phased out in three installments by December 31 this year, after the grant of MFN status to India. The MFN status will mean India can export 6,800 items to Pakistan, up from around 2,000 at present. “We started the process to normalise the trade with India last year in April. Both the countries have adopted a well-structured and calibrated approach and made steady progress,” he said adding that next secretary-level talks are due to held in Pakistan this month.

“Negotiations to set up bank branches in each other country are underway and we hope further progress on easing visa rules for Pakistani businessmen and removing non-tariff barriers on Pak goods import in India in next meeting.”

“It’s a step-by-step approach that will benefit both the countries,” he added.

He said two countries in April inaugurated a trading post at Attari-Wagah crossing that will help speed-up transportation of goods to either side of the border. It is expected that number of daily trucks crossing the border will sharply go up to four times to 600 from present level of 150.

He said the MFN status to India, setting up of bank branches and easing visa rules will help boost bilateral trade and pave the way for frequent exchange of trade delegations and arrange exhibitions in the two countries.

Pakistan successfully concluded a lifestyle exhibition in New Delhi last month while India attended the similar expo in November. “The exhibition will go a long way in opening of trade opportunities for Pakistan business,” he said.

Puri dispelled the impression that Pakistani products will not be able to compete in Indian market. “Pakistani products are competitive and known for its quality. We are competing in international markets in US, Europe and Middle East and can compete the Indian products as well.”

“Pakistan achieved $25 billion exports target last year due to enabling environment. This year, we are sustaining the same level despite economic problems in Europe and some other international markets,” he said.

Puri, at the investment meeting, also presented a snapshot of Pakistan trade with major regions like NAFTA, Saarc, Asean, EU where tremendous opportunities exists for Pakistani businessmen.

muzaffarrizvi@khaleejtimes.com