Home / Politics / News /  Easing of India-Pakistan strains may lose pace

New Delhi: The pickup in India-Pakistan ties since last year, driven by a marked improvement in economic cooperation, could lose momentum because of the political turmoil in Pakistan, analysts say.

The South Asian neighbours had tentatively resumed their peace dialogue, halted by the November 2008 Mumbai terrorist attacks, in February last year, after identifying key disputes to discuss.

The two rounds of talks since then yielded a series of landmark measures to boost trade and liberalize visa procurement procedures—moves aimed at slowly rebuilding the trust shattered by the 26-29 November Mumbai attack when 10 Pakistan-based terrorists targeted locations in India’s financial capital.

At the helm: Pakistan Prime Minister Raja Pervez Ashraf. Aamir Qureshi/AFP

“It was the policy of the (Gilani) government to improve relations with India, particularly in the area of trade," Ayesha Siddiqa, a Pakistan-based analyst said by phone from Islamabad. But now, with the political uncertainty in Pakistan, “everything bilateral will go on the back burner as the government will be trying to fend for itself at home", she said.

In New Delhi, Charan Wadhva, economist with the Centre for Policy Research, agreed that the current state of Pakistani politics would have an impact on the recent improvement in ties but “any setback would be temporary. As long as there is a constituency for peace and improvement in trade relations, I don’t see any long-term breakdown. Both India and Pakistan have a vested interest in improving trade and investment cooperation", Wadhva said.

Those with vested interests are still sounding optimistic.

“Political changes might take the focus away for a while (from the peace process), but I am sure there will be no deviation" from the path taken, Amin Hashwani, head of the Pakistan-India CEOs Business Forum, said by phone from Pakistan.

Officially, India is adopting a wait-and-watch approach. “We are very closely following political events in Pakistan, and we would like the political impasse to be settled; and whatever happens in Pakistan, I think it shouldn’t impact bilateral relations," foreign minister S.M. Krishna told reporters last week.

Trade is being seen as the driver of recent efforts to forge peace between the neighbours with many unprecedented steps being announced in the past year. These included India’s in-principle decision to allow Pakistani firms to invest in the country, the setting up of an India-Pakistan joint business council and talks between the Reserve Bank of India and the State Bank of Pakistan to allow banks from both the countries to open branches in each other’s territory.

Both countries also opened a second gate for commercial trucks at the Wagah-Attari land crossing between the two countries. The new gate has the capacity to handle about 600 trucks a day, and is expected to increase trade from the present $2.7 billion.

These moves were preceded by Pakistan moving towards trade with India based on a negative list and delinking the normalization of trade ties with a resolution of the Kashmir dispute despite pressure from hardline groups. Pakistani media reports earlier this year cited foreign minister Hina Rabbani Khar as saying that Pakistan will grant India the most favoured nation (MFN) status by December 2012. While India has accorded Pakistan MFN status under World Trade Organization (WTO) rules in 1996, Pakistan had not reciprocated.

Both countries were also close to signing a liberalized visa pact that will allow businessmen greater freedom to travel in the other country. Currently, businessmen can visit only three cities in the other country and have to report to police during their stay on single-entry visas.

Both the countries will also have, for the first time, paved the way for the issue of tourist visas to each other’s citizens, besides extending visas on arrival to senior citizens and young children entering India or Pakistan through the Wagah-Attari land border.

The focus on improving economic ties as part of the peace process was given a further push during Pakistan President Asif Ali Zardari’s visit to New Delhi on 8 April. The two sides also agreed on the possibility of fast-tracking talks towards arriving at a solution on demilitarizing the Siachen glacier, and the land and maritime boundary dispute in Sir Creek area between India and Pakistan during Zardari’s visit that would result in Singh’s visit to Pakistan by the end of this year.

In his letter congratulating Ashraf, Singh said he was confident India and Pakistan “will continue to make progress in their bilateral dialogue on all issues and build good neighbourly relations by strengthening their cooperation in all areas for the benefit of the peoples of both countries".

But analysts say the chances of a visit to Islamabad by Singh have dimmed.

“I think a visit to Pakistan by Prime Minister Manmohan Singh in the present circumstance is improbable," said former foreign secretary Lalit Mansingh. “It is unsure how long the new prime minister will last," he said, referring to reports of Ashraf being under a cloud due to a reported probe by the Pakistan National Accountability Court looking into charges of alleged corruption against the new PM.

“More than that, Gilani was dismissed because he refused to give a go-ahead to investigate charges of corruption against Zardari. If the new prime minister does the same, the Supreme Court could dismiss him, too, on the same grounds. So we are looking at a period of political instability till the next elections, due in 2013. If the Pakistan opposition and the army agree that the only solution to this constitutional impasse is elections, there could be elections as early as this year," Mansingh said.

Compounding the problem were Pakistan’s internal security problems—the rise of Islamist insurgency and Pakistan’s deteriorating ties with the US. “If you take all these together, a visit to Pakistan by Singh looks difficult," Mansingh said.

As for the peace process, Mansingh described the dialogue as “sputtering along".

“We need to wait and see what happens to a proposed visit to Islamabad by foreign minister S.M. Krishna—whether it happens at all or not," Mansingh said, referring to plans by Krishna to hold talks with Pakistan foreign minister Khar to take stock of the recent official-level peace dialogue and suggest ways to keep the process going in the future. “That (the Krishna visit planned for mid-July) will be a pointer to how the peace process moves along," Mansingh said.


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