Pakistan may grant the long overdue most favoured nation (MFN)
status to India by the end of this year that will reduce tariff
and non-tariff barriers and broaden the trade basket between the
two countries, top Pakistani officials have said.
This is expected to triple the current volume of bilateral trade
in three years, the officials said. India already accords MFN
status to Pakistan but Islambad has been slow to reciprocate
fearing trade imbalance.
"Business community of Pakistan have strongly recommended to the
government that most favoured nation status should be given to
India," said Mirza Ikhtiar Baig, a advisor to the Pakistan's Prime
Minister Syed Yousuf Raza Gilani.
"The government is positive on it and very soon you will hear a
good news, hopefully by the end of this year," Baig, who was on a
visit to India, told IANS in an interview.
He said commerce secretaries of the two countries will meet in
November to finalise the issue.
"MFN status is likely to be announced either during commerce
secretaries meeting or during Indian commerce minister's visit to
Pakistan," said Baig, who is also a leading Pakistani
industrialist and chairman of the Baig Group of Industries.
India's Commerce and Industry Minister Anand Sharma is scheduled
visit Pakistan in November. Sharma is likely to be accompanied by
a high-level business delegation.
The MFN status could be a big step forward in strengthening trade
ties between the two nuclear neighbour countries whose relations
have been marred for decades by a host of issues, including
Kashmir and terrorism.
Once the MFN status is granted, Pakistan will have to treat India
on par with its other favoured trading partners. India has already
granted most favoured nation status to Pakistan and is treating it
on par with other trading partners.
Pakistan Commerce Minister Makhdoom Mohammad Amin Fahim, who was
on a five-day visit to India last week, leading a 80-member strong
business delegation, said granting MFN status to India was on
priority of his ministry and the final decision would be taken
When asked what issues were holding the decision, Fahim said,
"Nothing is holding us. It is a procedure that we have to follow.
We have taken first step, it will be followed by second, third,
fourth and then we will take final decision."
"It will happen very soon," Fahim told IANS.
Baig, who advises the Pakistan's Prime Minister on issues of
textiles, the country's major export sector, said by the end of
this year Pakistan would also move from "positive list" to
"negative list" trade regime with India as required under the
Pakistan maintains a "positive list" of 1,945 items which are
allowed to be imported from India. Under the South Asian Free
Trade Agreement (SAFTA), Pakistan operates a sensitive list
(negative list) of 1,169 items.
Baig said Pakistani authorities were working to further reduce the
unnecessary long negative list to make SAFTA more effective and
Commerce ministers of India and Pakistan last week set a target to
increase bilateral trade to $6 billion in three years from the
current $2.7 billion. Baig said the $6 billion target could be
achieved easily given the huge potential of trade in agriculture,
raw materials, cement and textiles sector.
"Apart from the $2.7 billion official data, already there is $3
billion trade through illegal channels. If we streamline things
and reduce tariffs, it will be channelised. So already there is $6
billion trade," he said.
(Gyanendra Kumar Keshri can be contacted at firstname.lastname@example.org)