Lowering of barriers sees cementing of trade relations between India, Pakistan

Lowering of barriers sees cementing of trade relations between India, Pakistan
Comment E-mail Print Share
First Published: Tue, Apr 08 2008. 05 42 AM IST

Flourishing trade: Trucks carrying tomatoes drive across the Line of Control, along the area where soldiers from both countries enact a jingoistic flag-lowering ceremony every evening. (Photo: Rahul C
Flourishing trade: Trucks carrying tomatoes drive across the Line of Control, along the area where soldiers from both countries enact a jingoistic flag-lowering ceremony every evening. (Photo: Rahul C
Updated: Tue, Aug 19 2008. 03 59 PM IST
Attari (Amritsar): Bira Singh stands along with 600 men clad in similar blue tunics just yards inside India’s border with Pakistan. They are awaiting the arrival of trucks from Pakistan and India. Not only will Singh and his co-workers offload the goods arriving from Pakistan, they will do a similar job for trucks bound out of India so that customs officials can inspect the consignment for contraband. They will then reload these trucks.
Flourishing trade: Trucks carrying tomatoes drive across the Line of Control, along the area where soldiers from both countries enact a jingoistic flag-lowering ceremony every evening. (Photo: Rahul Chandran/ Mint)
Till October, the process was even more cumbersome; trucks from either country, which have fought four wars since both gained independence in 1947, were not allowed to cross the border. So, Singh, like his father did before him, would trudge to the border with Pakistan with goods from India and transfer them to people like him on the other side—human cargo carriers— and return with goods meant for India. That changed in October with the two countries allowing free movement of trucks across the border.
The impact of this seemingly simple change in procedure has been immediate. It has not only changed the way truck loaders work, but has multiplied trade and transformed the economic eco-system in the vicinity of Lahore and Amritsar, the Pakistani and Indian cities closest to the border the two countries share. The result has been the creation of new markets and new opportunities.
In the six months since, locals here estimate that hundreds of jobs, and several new markets have been created. Tomatoes from Nashik in Maharashtra and Ahmedabad in Gujarat now sell in cities as far away as Multan and Islamabad in Pakistan.
Truck traffic has grown sixfold to 60 a month. And trade volume between the two countries has jumped 60% to an estimated 85,715 tonnes in 2007-08. “In agriculture, it is very simple. They have a huge shortage of tomatoes, so we send tomatoes there. Earlier, when we used porters, we could send only 10 truckloads and they all sold in the markets of Lahore. Now, demand is higher because the produce can go as far as Multan or Islamabad or Karachi,” said Rajdeep Uppal, an Amritsar-based exporter.
“In the last month alone, 50-70 trucks have been going across every day. There is a huge shortage of tomatoes in Pakistan. If it were not for our tomatoes, the price over there may have gone up to Rs50 per kg,” added Uppal.
A booming infrastructure sector in India has created a huge demand for cement, import of which has been allowed from Pakistan since September. It comes by train from across the border, sells for Rs200 on an average for a 50kg bag—around Rs50 cheaper than locally available brands.
In between taking calls for Pakistan-made cement from local customers, G.S. Chatha, a rice exporter who moved into the cement—specifically Pakistan-made cement—business last year said the lack of any large cement plants in Punjab and Haryana made it cheaper for people to buy cement from across the border.
Bags of green chilli pepper bound for Pakistan wait to be loaded at a goods station in Amritsar, Punjab. (Photo: Rahul Chandran/ Mint)
“Cement manufactured there is of much better quality because it has a lower ash content,” Chatha said. “Builders have to use four bags of Pakistani cement as opposed to five bags of Indian cement.”
Importers typically buy a grade of Pakistani cement called OPC, short for ordinary portland cement, which has a lower ash content and hence, boasts better bonding ability. This is considered better than the widely available PPC grade, which local makers sell for an average of Rs225 onwards, said Uppal. “OPC is a better cement because it has lower ash content. It is preferable to PPC. For example, the government says government buildings have to be built using OPC. We sell OPC from Pakistan for Rs200,” Uppal added.
Uppal was among the first to import cement from Pakistan. “Unlike vegetables, where there is a ready-made market, for cement, we had to build a market. Local dealers were facing pressure from Indian companies. Also, Indian customers would rather buy ACC cement rather than Pakistani cement. After all, God knows how good the quality is.”
In the eight months since Uppal imported the first consignment of cement from factories around Lahore, trade has grown manifold, despite infrastructural bottlenecks and mutual suspicions. Much like the popular flag-lowering ceremony along the Radcliff line—23km from Lahore and 30km from Amritsar—where every evening tourists gather on both sides of the border, shouting slogans as soldiers from the two countries enact a nakedly violent, chest-thumping ceremony.
Trucks line up along National Highway 1—the road that runs along roughly the same alignment as the Grand Trunk Road built by Sher Shah Suri, the Afghan warlord who conquered large parts of northern India in the 16th century—waiting for customs officials to open the gate for the final few hundred metres.
Porters unload crates of tomatoes bound for Pakistan, for inspection. Tomatoes from Nashik and Ahmedabad now sell as far away as Multan and Islamabad. (Photo: Rahul Chandran/ Mint)
A couple of kilometres from the Attari border post, goods trains make their way from Lahore in Pakistan carrying cement, while those travelling east carry green and red chilli pepper. Again, politics and security perceptions necessitate a two-hour ritual where Border Security Force (BSF) personnel “rummage” the train, looking for everything from narcotics to hidden bombs and weapons. Despite the high demand for cement in India, the trains are not allowed past Attari if they arrive later than 4pm because the trains cannot be rummaged effectively after dark.
“We get some very cryptic messages,” said one customs official, who did not want to be quoted. “Once I got a call from the Intelligence Bureau saying there is going to be 60kg of narcotics in one of the trains... ”
Another said: “Demand and revenue may be high, but it is still a hostile country.”
“It is still a hostile country, so we have to be careful,” said a customs official in Amritsar, when asked about the train.
“We had been saying that they had to scrap this medieval system,” said Gunbir Singh, who heads the Amritsar chapter of the Confederation of Indian Industry, a trade body that had been lobbying for the opening of the border.
Pakistan currently allows six items—onions, tomatoes, potatoes, garlic, livestock and frozen meat—to be imported from India through the Attari border post. Indian officials say India doesn’t impose any import restrictions, but the only thing that comes India’s way through the land border is dry fruit from Afghanistan and cement on trains. India, however, relies on the US for the majority of its dry fruit, with Afghanistan accounting for just 20% of its imports.
A recent report by New Delhi-based think tank Indian Council for Research on International Economic Relations said trade between the two countries could touch $6.6 billion (Rs26,334 crore) if barriers to trade are removed.
Comment E-mail Print Share
First Published: Tue, Apr 08 2008. 05 42 AM IST
More Topics: Video story | India | Pakistan | Attari | Amritsar |