Indian industry eyes enhanced trade with Pakistan under SAFTA

Wednesday, 31 December 2003, 20:30 IST
Printer Print Email Email
NEW DELHI: The Federation of Indian Chambers of Commerce and Industry (FICCI) said Wednesday the formation of a South Asian economic bloc would give a major boost to the present insignificant trade between India and Pakistan. The South Asian Free Trade Area (SAFTA) agreement could help India and Pakistan increase trade to more than $4 billion over the next four to five years from the present level of just over $200 million, said Y.K. Modi, president-elect of FICCI. "The signing of SAFTA by the countries in the region will definitely have a favourable impact on India-Pakistan bilateral trade as well," Modi told a press conference here. "This is because the restriction by Pakistan to limit trade with India to only a designated list of 600 items from India will have to go and all the items will become tradable," he added. Pakistan maintains a "permissible list" of 600 items like chemicals, minerals, metal products, cardamom and tyres that may be legally imported from India. Most finished products and white goods are not part of this list. India and Pakistan have an official annual trade of around $200 million, but exports through third countries total nearly $1 billion. Experts say trade could rise to nearly $4 billion if they started trading with each other directly. FICCI said it was optimistic that the SAFTA agreement, on which the South Asian countries have been working for years, would be the high point of the 12th SAARC summit in Islamabad. The three-day SAARC summit, which will bring together leaders from the seven South Asian countries, will begin in Islamabad on January 4 after a year's delay. Bangladesh, Bhutan, India, Pakistan, Nepal, the Maldives and Sri Lanka are members of the SAARC. Modi, who will address a symposium on regional cooperation in Islamabad on January 2 as a run up to the high-level SAARC discussions, said he would also hold talks with business and political leaders of Pakistan to boost bilateral trade. "Official trade between India and Pakistan is small even by South Asian standards. It is a quarter of India's trade with Bangladesh, one-third of the trade with Sri Lanka and less than half of the trade with Nepal," said Modi. "The potential for trade between the two countries is quite high and spread across a large number of sectors," he said, adding the easing political tension between the two nuclear-capable neighbours also augurs well for boosting trade.
Source: IANS
siliconindia