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Indian, Pakistani businessmen eye lucrative trade

Business leaders of hostile neighbours India and Pakistan on Tuesday discussed ways to overcome obstacles to bilateral trade that they said had the potential of reaching up to $10 billion a year.

Chirayu R Amin, newly appointed Indo-Pakistan Chamber of Commerce and Industry president, told a news conference that if the barriers were removed, trade between the arch rivals had the potential to reach between $5 billion and $10 billion.

"The (Indian) government is definitely interested that trade should go up. That's why we are here...and am quite sure that the Pakistani government also thinks in the same way," Amin said.

According to Amin, official trade between India and Pakistan currently stands at $200 million annually but the unofficial figure was at least five times that amount.

Most trade between them takes place through a third country or simply via smuggling that brings no revenue to the two governments.

But the two countries, which have fought three wars since gaining independence from Britain in 1947, are sceptical of each other's intentions and have shied away from normalising trade relations with each other in the past.

Amin, leading a delegation of 35 Indian businessmen from the Federation of Indian Chambers of Commerce and Industry, said the bottlenecks in trade included issues relating to taxes, infrastructure and travel.

Open trade

The IPCCI decided on Tuesday to set up working groups to look into the problems in each of the problem areas and prepare recommendations which the body would discuss with respective governments for action.

"The business community of both our countries realise that by more open and free trade between India and Pakistan the economies of both the countries would stand to gain tremendously," said Amin, who was due to meet Pakistani ministers later on Tuesday.

He said that in meetings with the finance and commerce ministers the Indian delegation would urge the Pakistani authorities to expand a list of items that Islamabad allows to be imported from India.

He was referring to a list of about 600 items that Islamabad allows to be imported from India. India has no equivalent list.

Amin said he would also discuss the issue of granting most favoured nation status to India by Pakistan. Under World Trade Organisation rules two countries can grant MFN status to each other for trade purposes.

Successive Pakistani governments have pondered but hesitated to grant New Delhi such status for a variety of reasons, including fears from Pakistani businesses that cheaper Indian goods would flood the local market.

Ilyas Ahmed Bilour, outgoing IPCCI president, said he hoped the meeting of the two sides would lead to better trade relations.

"...in the recent past the two-way trade could not take place due to political reasons. I am sure that this visit will ease the political tensions in both the countries for expanding cooperation in the commercial and economic spheres," Bilour said.

The IPCCI meeting concludes on Tuesday but the Indian delegation was due to stay on in Islamabad for a meeting of the South Asian Association for Regional Cooperation the next day.

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