Restoration Of Indo-Pak Composite Dialogue Will Push Their Trade To Us$ 5 Bln. By 2010
Welcoming restoration of composite dialogue process at Ministerial levels between India and Pakistan, The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has exuded optimism that it would propel their two-way trade to over US$ 5 billion by 2010.
By 2007-08, the estimated levels of two-way trade between India and Pakistan are around US$ 2 billion in which balance of trade tilts much more in favour of India, says the ASSOCHAM Paper on Indo-Pak Economic Relations : The Aftermath of Composite Dialogue.
The Paper which has been submitted to the Ministry of External Affairs on Monday by the ASSOCHAM President, Mr. Venugopal N. Dhoot also emphasizes that the composite dialogue is likely to facilitate earlier execution of Indo-Iran trans Pakistan pipeline and Turkmenistan-Afghanistan-Pakistan pipeline project. It may be mentioned here that India has formally joined the Turkmenistan-Afghanistan-Pakistan project while it was a strong advocate for Indo-Iran trans Pakistan pipeline project ever since it was conceived many years ago.
Referring to the two-way trade of India and Pakistan, Mr. Dhoot said that as a matter of fact, the two way between India and Pakistan could have exceeded the projected levels of US$ 5 billion in next 2 years had the process for composite dialogue not discontinued in the past in view of internal disturbances in Pakistan. Secondly, Indo-Pak two-way trade could also have been accelerated beyond expectations, if Pakistan had reciprocated in according the Most Favoured Nation (MFN) status to India.
The ASSOCHAM Chief, however, said that it is heartening to observe that India’s exports to Pakistan and its imports from Pakistan has been growing at an average rate of 62% and 65% since 2002-03 until 2007-08. 2002-03 was the period in which the previous government had taken lot of initiatives for increased bilateral trade which are continuing in the UPA regime as well.
Based on the assumptions that both India’s exports and its imports would grow @ of 62% and 65% respectively, naturally the two-way trade would stay around US$ 5 billion and the process of composite dialogue would be responsible for this as its continuation would open up the borders of trade that remained closed for many decades, said Mr. Dhoot.
Bilateral trade swelled from $235.74 million in 2001-02 to around $2 billion in 2007-08. 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 yam & fabrics and organic chemicals.
Pakistan has expanded its positive list of import trade with India to include machinery/equipment, raw materials, chemicals and accessories of a number of manufactured items that are in great demand. India granted Pakistan MFN status but Pak has not reciprocated. There are vast untapped trade and investment possibilities between the two countries which need to be exploited with significant welfare gains.
The Paper says that major areas of Indo-Pak collaboration could be Information Technology and IT enabled services. The scope for cooperation is enormous. It also says that potential sectors for cooperation could include agricultural products, tyres, auto spare-parts, minerals, chemicals, pharmaceuticals, leather, textiles, telecommunications, gas pipeline, electricity generation using coal and wind energy in the Sindh province of Pakistan. Other areas offering profitable ventures could be healthcare, entertainment services, information technology, energy and tourism.
