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Business News/ Politics / Policy/  Pakistan may soon free up trade via land
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Pakistan may soon free up trade via land

Pakistan now allows only 137 items to be imported from India through the land route out of around 6,000 tradable items

Trade minister Anand Sharma said India and Pakistan will sign three agreements to facilitate trade during commerce secretary-level talks. Photo: Mint (Mint)Premium
Trade minister Anand Sharma said India and Pakistan will sign three agreements to facilitate trade during commerce secretary-level talks. Photo: Mint
(Mint)

New Delhi: In an effort that could give a boost to Indian exports to Pakistan, the latter may soon allow more goods to be imported through the Wagah border. It now allows only 137 items to be imported from India through the land route out of around 6,000 tradable items.

This is part of the agenda of the forthcoming commerce secretary-level talks between the two countries expected to be held in mid-September in Islamabad after the foreign ministers of both sides meet from 7-9 September, said a commerce ministry official speaking on condition of anonymity.

The official said the Indian side had learnt informally that Pakistan’s commerce ministry has taken the proposal to its cabinet for approval. “We are even hoping that they will do it even before the commerce secretary-level talks," he said.

India expects Pakistan to substantially increase the list of tradable items through the land route, the official said. “We are urging them to make it the same as the Indian one, where there are no restrictions. We expect it to be at least what the current infrastructure can handle."

The official further said that the Pakistan side had agreed to free up trade through the land route much earlier.

Trade has been expanding rapidly through Wagah even though only a small number of items are allowed to be traded through the land route, said Nisha Taneja, a professor at the Indian Council for Research on International Economic Relations.

“Allowing more items to be traded through the land route will lead to some trade shifting from the Attari rail route to the Wagah land route," she said.

Asked whether any progress has been made on the proposal of linking the two capitals of the neighbouring countries by air, the official said the commerce ministry was waiting for a response from Pakistan. “If they agree on it, we will take a representative from the aviation ministry in our delegation," he said.

At an interaction with the visiting Pakistani parliamentary delegation, organized by lobby group Federation of Indian Chambers of Commerce and Industry, Indian trade minister Anand Sharma said both countries will sign three agreements to facilitate trade during the commerce secretary-level talks. These include an agreement for customs cooperation, trade redressal, and mutual recognition and certification.

The commerce ministry official cited earlier said the finance ministry was trying to get cabinet approval on the three issues before the commerce secretary leaves for Islamabad.

“The mutual recognition agreement will help them (the Pakistani business community) to become more aware of procedures. An institutional mechanism will be built under which if the Pakistan exporter has any issue, it will be heard by a particular committee on the Indian side," he said.

Earlier this month, India’s cabinet reduced the South Asian Free Trade Area (Safta) sensitive list for Pakistan by 30% to 614 items. The list of the reduced items includes 155 agricultural items, 106 textile items and three petroleum products, including aviation turbine fuel. India is expected to reduce peak tariff rates to 5% within three years as per the agreed Safta process of tariff liberalization.

Meanwhile, foreign minister S.M. Krishna, speaking about his forthcoming visit to Pakistan said he was going there this time with “greater optimism" given the progress made in the past year since official-level talks were resumed last February.

“India is of the view that normalization of ties with Pakistan should be a step by step process. My visit to Pakistan is one more step in that direction," he said, adding that it would not be “fair to prejudge the outcome".

Krishna’s visit to Pakistan from 7-9 September will be his second—the first being in July 2010. Besides talks with his Pakistani counterpart Hina Rabbani Khar on 8 September, Krishna will also be going to Pakistan’s cultural capital Lahore before returning home on 9 September.

Elizabeth Roche contributed to this story.

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Published: 05 Sep 2012, 12:44 AM IST
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