It holds that the expansion and diversification of restrictions on trade to check illegal trade through land borders and informal trade, carried out through third countries.
Informal trade proves to be costly as the product first has to be first exported to some other country, (Dubai or Singapore) and then re-exported to Pakistan. Informal trade is reportedly as voluminous and diversified as the regular trade.
Illegal trade overland across the borders is said to be more in quantum then the regular bilateral trade. The voluminous smuggling of commodities and merchandise between the two countries indicate mutually profitable economic opportunities.
It also indicates the suppressed desire of the business community in the two countries to trade more with each other. The smuggled trade exports to Pakistan include industrial machinery, tyres, chemicals and tea. Indian imports in this category include edible oil, spices, dry fruits and pulses.
India and Pakistan, according to the Paper should also discuss the issue of establishing web portals. Traders on both sides should be informed about the policy environment in the country through government websites. Improving information flows between the two countries will reduce the search cost of trading.
Shared heritage of culture, languages, and similarities of socio-economic systems should facilitate understanding and trade transactions. Exchanges in these spheres should be encouraged.
This should also include films, artworks, books and periodicals, visits by teachers, students and professionals. Exchange of publications would also enhance awareness about each others economy and trends of trade.
With restoration of democracy in Pakistan, Indian government can expect cooperation from Pakistan government in the infrastructure related projects in sectors such as railways, power and telecom.
Governments on two sides should play facilitators role and promote trade by relaxing the visa and travel regime, a pre-requisite for trade promotion.
Associated Chambers of Commerce and Industry of India
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