India , Pakistan mull new trade corridor

India and Pakistan are now planning to open a new land corridor across the two Punjabs to boost trade between the two countries. The route connecting Hussainiwala in Ferozepur district in Indian Punjab connects Ganda Singh Wala, in Kasur district of West Punjab in Pakistan. Trade between India and Pakistan transits only through the Attari-Wagah border connecting Punjab on both the sides. The two nations are in advanced talks to open Munabao in Rajasthan, India, and Khokharapar in Sindh, Pakistan. The rail line connecting the two towns had fallen into disuse after the 1965 India-Pakistan war, when the town itself was captured by Pakistani troops. However, it re-opened in 2006 with Thar Express running once in a week between the two stations.
Commerce ministry officials confide that the two countries are exploring the option of facilitating trade between India and Pakistan via a third route, connecting Hussainiwala and Ganda Singh Wala on either side, to help a larger number of traders in either country. “However, it will be taken up after the Khokharapar-Munabao route is cleared and would require cabinet approval, besides clearance from home ministry. The idea is to open up as many trade corridors as possible, especially restoring the traditional routes,” the officials said.
Until 1970, Hussainiwala-Ganda Singh Wala was the principal road crossing between India and Pakistan, and was a trade route for trucks, mostly for import of Kandahari angoor (dehydrated grapes) and other fruits and food products from Pakistan and Afghanistan. The border crossing was replaced by the crossing at Wagah, a little further north. In 2005, proposals were made to reopen the border, but it remained closed.
The process of enhancing trade ties between the two countries have gained traction in recent times, after being stalled in the aftermath of the Mumbai attacks in 2008. In April last year, commerce secretaries of the two countries met in Islamabad following a meeting of India’s prime minister Manmohan Singh with his Pakistani counterpart Yousuf Raza Gilani over a semi-final cricket match between the two nations in Mohali in March 2011.
In the past 12 months, the Pakistan cabinet has approved a proposal to ease trade with India by switching to a negative list-based import regime and following it up with a most favoured nation (MFN) trade status by the year-end. India had given MFN status to Pakistan 16 years ago. Under the negative list regime, notified by Pakistan in March, import of only 1,209 products will be barred from India. Till now, Pakistan traded with India under a positive list regime that allowed import of less than 2,000 items. However, this resulted in higher cost of Indian products imported into Pakistan through other countries.
Bilateral trade between the two countries stood at $2.7 billion in 2010-11 with exports from India at $2.3 billion, while imports from Pakistan at nearly $400 million. Major exports from India include sugar and confectionery items, dairy products and vegetables.