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Assocham moots JVs with Pakistan
By agencies
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Tuesday, 19 April 2005, 19:30 IST
NEW DELHI:Industry chamber Assocham has identified areas such as cotton industry, engineering products, leather, food processing, fisheries, educational institutes, services, information exchange and tourism for setting up JVs under the proposed Indo-Pak JBC.
Assocham President Mahendra K Sanghi said that unauthorized trade worth $1.5 billion happened between the two countries even in the above identified areas. Joint ventures in these areas would not only lead to betterment of socio-political ties with Pakistan but also result in increased bilateral trade.
Sanghi said Pakistan was one of the leading producers of cotton and textile yarn in the world, but was facing several constraints due to structural problems of the industry such as heavy concentration in spinning, inadequate modernization, and insufficient diversification of textile products.
Besides, the manufacturing process for the various fabrics required specialized machines involving modernization, technological up gradation and automation of the existing textile mills and the industry could benefit from fresh investments for modernization and technological advancements from the private sector in both the countries.
Pakistan was also importing a lot of capital goods, including electrical and non-electrical machinery and intermediate goods such as iron and steel products, many of which could be imported from India at a much lower cost than world market price.
The components and parts for specific machinery industries could be manufactured either in India or Pakistan and these could be sourced from each other for assembling.
The chamber has already projected enhancement of bilateral trade to $10 billion with Pakistan by 2010 provided enough initiatives are taken by the two governments from the present bilateral trade figure of 3 billion dollars To further enhance trade ties, Assocham has suggested that the Pakistan should grant MFN status to India as a trade facilitation measure.
India has already granted MFN status to Pakistan in 1996. The volume of informal trade is larger than formal trade. The official trade between the two nations can further flourish provided efforts are made to legalize the unofficial trade by improving trade infrastructure, the chamber added.