Normalcy in bilateral relations and resumption of
trade between Pakistan and India is one of the topics which are hotly
discussed especially in the trade and industry circles these days in
Pakistan and obviously by their counter parts across the border.
Despite the factor that with the implementation of
the WTO regime in 2005 and globalization of trade, the chequerred
history of relations including two wars between the two countries have
created a sense of mistrust among the people in general and business
community in particular.
The trade and business has been divided on the
subject for opening of trade borders with India. The group opposing the
resumption of trade with India, especially from up country is of the
view that India having advantage of economy of the scale in a large
segments of industries has the potential to overwhelm the smaller
industrial base in Pakistan hence the doors for free trade with India
should be allowed. They argue that the cost of inputs including utility
charges, rate of taxes and labour charges are too high in Pakistan which
would give an edge to the Indian products in Pakistan. They are of the
views that opening of doors with India may have crippling effects on
Pakistan industry. They say that currently, the trade balance is heavily
tilting in favour of India. Pakistan exports goods worth $400 million
against $1400 trade by India to Pakistan. They plead that this trade
imbalance is under the restricted conditions and you can imagine about
the volume of trade favouring India if free trade is allowed.
Besides the economics, they also express bitterly
against India on her overall behavior against Muslims in Kashmir.
On the other side, there are industrialists and
traders who are strongly supporting the resumption of free trade with
India. They have some valid reasons to support their stand on the
subject. They said that being the signatory to the WTO regime we would
be bound to open trade with India after December 31, 2004. Instead of
fearing we must accept the challenge right now instead of waiting for
two years. Zubair Motiwala, president of Karachi Chamber of Commerce and
the Chairman of SITE Association of Industry pleaded that currently,
Pakistan is successfully competing the Indian products in the
international market especially in the United States and the whole of
the European Union. When we have the potential to compete them abroad
why not in Pakistan? Why should we afraid of the Indian products when we
are producing products of much better quality as compared to Indian
products. He cited the example of certain categories of textile products
which have outclassed the Indians all over the world. For instance,
Zubair said that our bed wear products have outclassed the Indian all
over the world. There is no match in this category between India and
Pakistan. Similar situation prevails in knitwear and certain cotton
fabrics. Indians have an edge in georgette and some other silk products
but as far as cotton textile was concern we are much ahead of them.
Currently, Pakistan is importing entire textile machinery from far flung
destinations. India in collaboration with international textile
machinery companies was producing textile machines of the same standards
and qualities. Importing textile machinery from India will reduce the
cost of import.
In order to promote exports, everyone is looking for
bigger markets. A huge market is available at a walking distance in
India. We should take it as an opportunity instead of taking as an
object of terror for our industry. If the trade and industry in Pakistan
succeeds in finding market for their product in India, it will help
improving their volume of production at the economy of scale to help
bringing down cost of production also.
The trade between the two countries is carried out
through illegal channels over the years.
Bazaar and markets in all major cities of the country
are flooded with all sorts of varieties of Indian products. Who is the
beneficiary of this illegal trade? Obviously the smugglers and those who
are conniving this trade in both the countries. If this trade is made
legal the benefit would go into the government kitty, thus those who are
taking benefit of the situation are also opposing this positive
development, said some industrialists.
As far as the legal trade is concern it is also
carried out through involvement of a third country. The importers are
not directly trading with India but they get the same products through
countries in the Middle East or some other Far Eastern countries. If the
trade is taking place why not through legal channels.
Soon or later the trade between the signatories of
WTO rules has to take its way whether one likes it or not, but in the
regime of economics taking advantage of the situation matters instead of
loosing the game merely on the basis of likes and dislikes.
The rapid global changes taking place all around the
world. Highly developed countries like US and EU are taking refuge by
developing economic zone. In the Asian region we are missing this well
proved concept of co-existence.