As a follow-up to the story I posted yesterday regarding Pakistan yet again offering to de-nuke it's military if India would agree to do so ...
Peace bid may revive billion dollar Indo-Pak trade
AFP, New Delhi
Peace moves by India and Pakistan have kindled hopes of reviving trade worth billions of dollars that had withered under intense political hostilities between the arch-rivals, industry experts said Monday.
Despite the strained relations between the two countries, trade through illegal channels is flourishing and estimated at around 1.5 billion dollars annually and rising, they added.
The Times of India newspaper said official trade between the two neighgbours could go up to four billion dollars in two to three years -- from around 200 million dollars currently -- if ties are normalised.
The restoration of normal ties could create a trade region next in size only to China, with a market of 350 million middle class families with a per capita income of at least 1,000 dollars annually.
"The voluminous unofficial trade between the two countries is an indication of the mutually beneficial opportunities and the intense desire of the two business communities to trade with each other," said P.K. Jain, president of the PHD Chamber of Commerce and Industry, one of India's largest trade organisations.
"It can be contained and channelised through direct trade if both the governments take necessary steps in carrying out changes in their policies to facilitate official trade."
At the moment, official trade links are so poor that the two neighbours route much trade to each other through Dubai.
Businessmen travelling between the two countries have to take equally circuitous routes, multiplying the cost of air travel by eight to ten times.
Jain said despite the compelling logic for normal ties, it would be premature to expect trade to grow rapidly immediately as only the first steps towards peace have been taken.
Relations between the nuclear-armed rivals thawed Friday when Indian Prime Minister Atal Behari Vajpayee said New Delhi would revive air links with Islamabad and send an ambassador to the Pakistani capital, 17 months after severing ties.
Pakistan has welcomed the move, but analysts said the peace process has only just begun.
The president of the Confederation of Indian Industry, Anand Mahindra, said he was willing to lead an industry delegation to Pakistan and work with the Lahore Chamber of Commerce in support of the peace process and to cement trade ties.
He said the industry body had prepared a comprehensive report which showed the "synergies" between the two countries.
Indian officials said Pakistan allows the importation of only 610 items from India and these are subject to high tariffs, encouraging smuggling across the borders.
The officials said India has granted most favoured nation status to Pakistan for trade, which means imports are treated the same as any other countries' goods in India.
Industry officials said the resumption of trade talks was vital for the whole region as the rivalry between the arch-foes has thwarted free trade from taking off under the seven-nation South Asian Association for Regional Cooperation (SAARC).
"The resumption of trade ties and a trade dialogue will enable other important regional discussions such as SAARC cooperation and the preferential trade arrangement under it," Mahindra added.
SAARC has been negotiating a preferential trade agreement, which is the forerunner of a proposed free trade pact.
Taxes on the main export items of the member nations -- Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka -- remain high.
Intra-SAARC trade has ranged at around three to four per cent of the member states' combined trade with the rest of the world.
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Particularly interesting to me is the mention of a black market some 650% larger than the "official" trade. The market always wins and I like it a lot.
Phaedrus
Peace bid may revive billion dollar Indo-Pak trade
AFP, New Delhi
Peace moves by India and Pakistan have kindled hopes of reviving trade worth billions of dollars that had withered under intense political hostilities between the arch-rivals, industry experts said Monday.
Despite the strained relations between the two countries, trade through illegal channels is flourishing and estimated at around 1.5 billion dollars annually and rising, they added.
The Times of India newspaper said official trade between the two neighgbours could go up to four billion dollars in two to three years -- from around 200 million dollars currently -- if ties are normalised.
The restoration of normal ties could create a trade region next in size only to China, with a market of 350 million middle class families with a per capita income of at least 1,000 dollars annually.
"The voluminous unofficial trade between the two countries is an indication of the mutually beneficial opportunities and the intense desire of the two business communities to trade with each other," said P.K. Jain, president of the PHD Chamber of Commerce and Industry, one of India's largest trade organisations.
"It can be contained and channelised through direct trade if both the governments take necessary steps in carrying out changes in their policies to facilitate official trade."
At the moment, official trade links are so poor that the two neighbours route much trade to each other through Dubai.
Businessmen travelling between the two countries have to take equally circuitous routes, multiplying the cost of air travel by eight to ten times.
Jain said despite the compelling logic for normal ties, it would be premature to expect trade to grow rapidly immediately as only the first steps towards peace have been taken.
Relations between the nuclear-armed rivals thawed Friday when Indian Prime Minister Atal Behari Vajpayee said New Delhi would revive air links with Islamabad and send an ambassador to the Pakistani capital, 17 months after severing ties.
Pakistan has welcomed the move, but analysts said the peace process has only just begun.
The president of the Confederation of Indian Industry, Anand Mahindra, said he was willing to lead an industry delegation to Pakistan and work with the Lahore Chamber of Commerce in support of the peace process and to cement trade ties.
He said the industry body had prepared a comprehensive report which showed the "synergies" between the two countries.
Indian officials said Pakistan allows the importation of only 610 items from India and these are subject to high tariffs, encouraging smuggling across the borders.
The officials said India has granted most favoured nation status to Pakistan for trade, which means imports are treated the same as any other countries' goods in India.
Industry officials said the resumption of trade talks was vital for the whole region as the rivalry between the arch-foes has thwarted free trade from taking off under the seven-nation South Asian Association for Regional Cooperation (SAARC).
"The resumption of trade ties and a trade dialogue will enable other important regional discussions such as SAARC cooperation and the preferential trade arrangement under it," Mahindra added.
SAARC has been negotiating a preferential trade agreement, which is the forerunner of a proposed free trade pact.
Taxes on the main export items of the member nations -- Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka -- remain high.
Intra-SAARC trade has ranged at around three to four per cent of the member states' combined trade with the rest of the world.
********
Particularly interesting to me is the mention of a black market some 650% larger than the "official" trade. The market always wins and I like it a lot.
Phaedrus
