15.2.12

India - Pakistan trade






A most favoured nation (MFN) tag from Pakistan will have to wait for now but New Delhi and Islamabad are set to sign three bilateral agreements, aimed at boosting trade relations between the two neighbours. While officials from both the sides are still at work to put together a “comprehensive package”, indications are the deal this time may have to be limited to agreements on customs cooperation and redressal of trade grievances along with a mutual recognition agreement that will enable a regime with common standards. The Pakistani cabinet, which was expected to approve the negative list on Tuesday, deferred the decision. On Tuesday, local media had reported that the Pakistan commerce department had finalized a negative list of 636 items and it is likely to be implemented in three phases starting June 30 and ending by 2012. But differences within the cabinet have meant that the Indian delegation led by commerce and industry minister Anand Sharma may return without any substantial gain from the visit, the first bilateral trip by an Indian trade minister. Pakistan information minister Firdous Ashiq Awan told reporters that the cabinet deferred a decision as “all stakeholders were not on board”.The Indian business contingent accompanying the official delegation was disappointed with the outcome as it had hoped that the visit would open doors to trade. Sharma hasn’t given up just yet. He intends to discuss the MFN status and the negative list issue with his Pakistani counterpart Makhdoom Mohammed Amin Fahim in Islamabad on Wednesday and was hopeful of a positive outcome. Analysts said the political instability in the country had cast its shadow on trade. Analysts said any decision on the MFN issue would have to wait until there was more clarity on the political situation. Sections of Pakistan’s domestic industry are worried that Indian goods would swamp the Pakistan market once trade ties return to normal.

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