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India-Pakistan trade talks could help thaw ice

A leading Indian business group said on Thursday that it hoped its planned trip to Pakistan next week would break the ice between the two countries and pave the way for political talks.

The Federation of Indian Chambers of Commerce and Industry is taking a 35-member business delegation to Islamabad to attend a meeting of the Indo-Pakistan Chamber of Commerce and Industry from May 21 to 24.

"If business improves at this stage, it will hopefully facilitate a political dialogue between the two countries," FICCI secretary general Amit Mitra told reporters.

The IPCCI was formed during a groundbreaking visit by Prime Minister Atal Bihari Vajpayee to Lahore in 1999 to seek peace between the two nuclear-capable neighbours.

But soon after the visit, India and Pakistan came close to a third war over the disputed Kashmir region after Islamabad-backed insurgents breached India's defences in northern Kashmir.

Since then major political and sporting links have been severed. The Indian government has refused to hold talks with Pakistan saying its neighbour must stop supporting guerrillas fighting its rule in Jammu and Kashmir.

Pakistan denies the accusation, saying it provides only moral and diplomatic support to Kashmiris seeking self-determination.

Mitra said talks with Pakistani business leaders would focus how to maximise trade under existing structures and transform unofficial trade into mutually beneficial official trade.

FICCI said Pakistan only allows the import of 600 items from India, excluding such goods as cars, consumer durables and computer software.

India places no curbs on imports from Pakistan but "high tariff rates in general and other fiscal measures are a deterrent to facilitate regular interaction", FICCI said.

Unofficial trade between the two countries is five times the official trade of about Rs 7 billion, the group said in a statement, adding that Pakistan loses about $500 million annually in customs duty to smugglers.

FICCI added that to improve trade between the two countries, it was vital to have a reliable transportation route.

It said construction of a road would be the "least time consuming and most cost-effective" as shipping was expensive and there was no rail coordination between the two countries.

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