Trade with Pakistan likely to go up $ 9 bn, ASSOCHAM
The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has suggested host of measures to achieve the target of Indo-Pak two-way trade to $ 9 billion in next few years even though two countries are currently entangled in political and economic deadlock.
Despite their trade as per current estimates has touched around $ 2 billion and its potential will grow many fold as their inter dependence on economic and trade related issues would leapfrog in future, thereby burring deep down Indo-Pak political differences, says the ASSOCHAM President, Mr. Sajjan Jindal.
Releasing its latest publication on `Indo-Pak Trade Ties', with its Secretary General, Mr. D S Rawat, the ASSOCHAM Chief expressed optimism that in future, rail and road linkages between India and Pakistan would witness intensifications, thus pave ways for larger movements of trade and tourism.
“Let us currently ignore for a while what has been going on political front for last couple of weeks between India and Pakistan and hope that the confidence building measures between the two countries would pick up for increased two ways economic gains”, said Mr. Jindal, clarifying that it is in view of this background that the ASSOCHAM projects Indo-Pak two way trade going up to $ 9 billion in next few years.
The prospects for increased two way trade are also based on the assumptions that cooperation between the India and Pakistan has been accelerating in field of banking, freight transport and goods like tea and rice.
After the launch of SAFTA in January 2006 and opening up of rail and road transport, bilateral trade increased to $ 400 million.
With SAFTA becoming operational in July 2006, over 4000 commodities were opened for trade compared to less than 1000 under the India `Positive Lists' maintained by Pakistan.
Exports from India to Pakistan have grown at a Compounded Annual Growth Rate (CAGR) of 60% and imports at a CAGR of 64% for the period 2002-07. Bilateral trade swelled from $235.74 million in 2001-02 to more than $1 billion in 2006-07.
Share of Pakistan's exports to India in total exports rose from 0.5 percent in 2001-02 to 1.8 percent in 2005-06. Balance of trade has remained in favor of India.
The main commodities of exports to Pakistan include sugar, dyes, plastic & petroleum products and cotton while main import items from Pakistan are petroleum & crude products, fruits & nuts (excluding cashew nuts), cotton yarn & fabrics and organic chemicals.
The Chamber has come out with host of recommendations which include the key to solving Indo-Pak issues lie in increasing bilateral trade, promoting people to people contact and raising businessmen's stake.
The Paper points out that India has granted Pakistan MFN status, though Pakistan has not reciprocated presumably because the trade balance is highly in favor of India.
Both the countries should device means and ways to reduce the imbalance by opening fresh trade routes and encouraging Indian traders to identify more commodities for import. Improved trade relations between Indian and Pakistan would lead to an environment more congenial for strengthening SAARC as a whole.