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India wants Pakistan to liberalise trade list

Sheela Bhatt in Delhi

The commerce ministry, in consultation with the Prime Minister's Office, has drafted a paper to be presented if such an opportunity arises after Prime Minister Atal Bihari Vajpayee and Pakistan President General Pervez Musharraf meet on Sunday, July 15, in Agra.

While Commerce Minister Murasoli Maran is part of the Indian delegation, his Pakistan counterpart Abdul Razzaq Dawood, is not accompanying Musharraf.

According to sources, India would put forward an argument that if Pakistan cannot normalise trade by way of granting India 'Most Favoured Nation' status, it should at least liberalise the restrictive trade list.

Pakistani hawks have opposed a discussion on trade without a resolution of the Kashmir issue.

Dawood's extensive study of the potential of Indo-Pak trade was discussed when a Federation of Indian Chambers of Commerce and Industry delegation visited Pakistan in May. The FICCI team also met Pakistan Finance Minister Shaukat Aziz.

According to commerce ministry sources, India would like Pakistan to release at least 60 more items that could be traded freely. As of now, the list contains 600 items. The Indian side feels this is restrictive and regressive for trade between the two countries.

Commerce Secretary Prabir Sengupta refused to speak on the trade agenda at the Agra summit, but said, "At present, 600 items are freely traded on payment of usual duty. Depending upon the regime Pakistan agrees to adopt, trade from India can go up. If Pakistan agrees to grant MFN status to India, as India has accorded to Pakistan, then there will be no limit to the trade potential."

Pakistan's textile industry is in dire need of funds, but the economic sanctions imposed and the country's huge external debt of $ 38 billion has worsened the situation.

Textile businessmen from both nations have been lobbying for relief since India has the capital and machinery to salvage Pakistan's textile industry.

The All-Pakistan Textiles Mills Association had taken up the issue with Aziz before the Pakistan budget in June.

Pakistan has denied India MFN status under Article 24, paragraph 11 of GATT 1994 relating to special arrangements for trade between India and Pakistan.

"At all levels, powerful industrialists are lobbying in both countries, demanding flexibility in imports and exports," a commerce ministry official told rediff.com

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