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CII scripts 4-step plan to boost Indo-Pak trade ties

In keeping with the trend in bilateral relationships with other countries where business and economic linkages are being given precedence over political relations, the Confederation of Indian Industry has said that Indo-Pak relations should also be strengthened on the same lines.

The need to forge sound bilateral ties with Pakistan is further emphasised in the emerging context of the world economy and new international economic order, where countries within regional groups are found to be taking steps towards promoting trade with their neighbours.

To achieve this CII has recommended a four-step process that would set the stage for forging better economic ties:

1. Accelerate confidence building measures
2. Encourage mutual sourcing
3. Remove infrastructural and logistic inadequacies
4. Improve connectivity

The business communities of the two countries have expressed that the existing environment does not favour a situation of steady growth in bilateral trade.

Ascribing political factors as major deterrents for enhancing Indo-Pak trade and economic cooperation, CII has recommended formal institutionalisation of a joint parliamentary conference as a first step towards building confidence between the business communities on both sides of the border.

The joint parliamentary conference could have a secretariat with representatives from private sectors of both the countries in its economic & commercial wing.

Another important measure to forge a relationship of trust and optimism would be to explore holding bilateral summits of economic ministries at regular intervals.

CII has also stressed that the Pakistan government should encourage investment in Pakistan by the Indian enterprises and work towards removing all non-policy hurdles.

CII sees 'Buying from Pakistan' as an important aspect for taking forward the economic relationship between the two countries.

However, it should not be viewed as concessional arrangement, and should instead be viewed from the angle of pure commercial advantage, CII has stressed.

Consideration of price competitiveness, quality, domestic supply scenario, etc, should guide choice of products.

Given this, certain concessional measures on the part of India, especially special tariff regime may be considered, CII has pointed out.

Likewise, in the interest of broad-based industrialisation and widening the export basket, the confederation has stated that the government of Pakistan needs to encourage the Pakistani enterprises to import from India all their requirement of raw materials, intermediate goods and components.

For taking forward this agenda, Pakistan should either dismantle the existing list of items or enlarge the list to include all items of industrial raw materials, semi-finished goods, components and capital goods.

Inadequacies in infrastructure and logistics for trade flows are also acting as major bottlenecks for enhancing economic co-operation.

Both the countries need to take adequate measures to remove such stumbling blocks for facilitating trade.

According to CII, removing visa restrictions and other hurdles on visas for businessmen could be a major initiative in this regard.

CII has also stressed on the need to enhance Indo-Pak border trade and open well-equipped custom entry points along the border, which would open land routes.

CII has also suggested that both the countries could remove the existing restrictions on movement of railway wagons, particularly dispense with the requirement of sending empty wagons.

Increasing the frequency of goods trains also would be a step in the right direction.

Besides improving railway connections, Indian Airlines could also explore enhancing the connectivity between the two nations, according to CII.

If the subcontinent has to emulate the economic success elsewhere in Asia, a stable structure of economic cooperation between the two nations needs to be put in place, the Confederation has emphasised.

In order to devise a structure for enhanced linkages and establish an enabling environment, the two governments should explore signing an Agreement on Protection of Trade and Investment, during the forthcoming visit of President Musharraf.

CII feels that the forthcoming summit would certainly help in clearing some of the misconceived apprehensions and pave the way for building a more constructive relationship.

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