PAK-INDIA TRADE

Most of the Pakistani businessmen are strongly in favour of trade with India

From SHAMIM AHMED RIZVI, Islamabad
July  21 - 27 , 2003 

After a goodwill mission of the Indian Parliamentarians led by veteran journalist Kuldip Nayyar, a strong delegation of Pakistani businessmen, representing all the federating units, completed a week-long tour of India under the leadership of Senator Ilyas Ahmed Bilour, a prominent businessman/industrialist from Peshawar.

Pakistani businessmen were invited to attend the 3rd meeting (July 7-8) of the India-Pakistan Chambers of Commerce and Industry in Delhi. On this occasion a six men representative delegation led by Mr. Bilour also called on Indian Prime Minister, Mr. Attal Behari Vajpayee, who warmly received them and hoped that visit of Pakistani businessman's delegation would lead to a better understanding and cementing of trade and commercial relations between the two countries.

Most of the Pakistani businessmen part of delegation or not are strongly in favour of trade with India. Admitting that India will benefit more from the bilateral trade, they maintain that Pakistan will also benefit a lot. They maintain that Pakistani industries can immensely benefit from the lifting of the ban on the import of textile machinery, petrochemicals and pharmaceutical raw materials from India. There is an absence of high-tech textile machinery manufacturing in Pakistan and the country is heavily dependent on imports. Though there are some two hundred manufacturing units of textile machinery in the country, they are basically copying old imported designs thus unable to meet the growing use of high-tech machines by the manufacturers. On the other hand, indigenous but quality manufacturers, the majority of whom have collaboration with leading textile machinery manufacturers of the world meet the bulk of needs of Indian textile mills. Many of these manufacturers are exporting machinery and related accessories under buy-back arrangement or as a part of their principal's global export strategy. Some of the textile machinery imported in Pakistan is reportedly made under license in India at much lower costs. The opening up of the trade would help Pakistani textile industry buy the capital machinery directly from India at much lower prices and shipment costs.

Similarly, Pakistan can also benefit greatly from import of petrochemicals use in the manufacture of a large number of goods including synthetic fibres, dyestuffs, drugs, pesticides, plastic products and artificial rubber. Buying directly from India would mean lower prices and reduced shipment costs to improve competitiveness particularly such leading exports as textile and leather. As stated earlier, even if the opening of the bilateral trade tilts heavily in favour of India it offers many intangible benefits to many Pakistani industries.

The efforts of prominent business leaders of Pakistan and India to exchanging ideas of normalizing trade relations should augur well for reshaping the economies of the entire South Asian region. Needless to point out that prospects of balanced and purposeful economic development have remained beset rather too long from bitterness between the two countries. It is good that top business leaders in India availed the opportunity to make telephone calls to Karachi, urging friends and trade partners in Pakistan to revive the paralyzed India-Pakistan Joint Chamber of Commerce and Industry, while also stressing the need of the two countries awakening to the urgency of together playing their due role in making SAARC an effective business forum for South Asian businessmen. Attributable, essentially, as this apparent change of heart on the Indian side is to their enlightened self-interest, similarly motivated should be the response of their counterparts on our side of the border. This should become all the more evident from the Federation of Pakistan Chambers of Commerce and Industry reportedly discussing the prospect of reactivating the joint chamber, along with the possibility of resumption of normal trade relations.

Little wonder, they appear to be keenly looking forward to resumption of air, over-land and sea links between the two countries, India had snapped two years ago. It goes without saying, as such, that resumption of these snapped ties, together with the revival of diplomatic activity, can mark the beginning of the long evasive joint effort towards greater mobilization of tremendous economic potential. It will be recalled that the joint chamber of commerce and industry, set up in 1999, under almost similar circumstances, has remained inert since then from the political compulsion later emerging. However, the second meeting of the executive committee inaugurated by former Privatization Minister Saleem Altaf was held in May 2001, but another meeting scheduled for December 2002 could not see light of the day. Nevertheless, it will be noted that as in politics, public opinion whether expressed or not does carry its weight, so in trade. The urge for business whether officially transacted or not, finds its reflection. This, of course, has reference to the quantum of mutual trade actually flowing between the two countries. For despite the low level of trade on official level 200 to 250 million dollars a year India and Pakistan have continued exchanging goods through illegal channels or through third countries to the extent of around $1 billion.

Noting that the actual gains of development can best be gauged from the volume of trade they generate, it is really unfortunate for both Pakistan and India that the millions continue to remain deprived of the gain of enormous investment in development from restrictions on mutual trade, thereby strengthening the grip of parallel economy in both the countries. And this should leave little to doubt from a comparison of the formal trade and smuggling, which is resorted to, to meet only part of the actual demand. For instance, only 600 items are officially allowed to be imported from India in Pakistan. However, a large number of the banned items from that country reportedly find their way into Pakistan, mostly through smuggling. According to one report, the Federation of Indian Chambers of Commerce and Industry has identified a number of items, including textile machinery and equipment, tannery equipment, machine tools and equipment, cotton fabrics, tyres, chemical goods, viscose fibre, cosmetics alcoholic beverages, stainless steel utensils, ayurvedic medicines, video tapes, cassettes, confectioneries and cashew nuts, brought in through unofficial channels. More or less, similarly forbidden Pakistani items, including plastic goods, synthetic fabrics, melamine dinner sets, textile and clothing, wheat, sugar; edible oil and vegetable ghee get smuggled to India. There exists, as such, a strong case for promoting strong trade ties between Pakistan and India in their own mutual interest. Now that the prospects of cordial relationship between the two countries have started brightening, it is time for businessmen to ensure creation of joint strategy for purposeful economic co-operation on a lasting basis.