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Business News/ News / India/  India signals readiness for restarting trade with Pak
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India signals readiness for restarting trade with Pak

The government has placed the onus of resuming normal relations on the neighbour

India is yet to receive any proposal from Pakistan on resuming trade (HT)Premium
India is yet to receive any proposal from Pakistan on resuming trade (HT)

Amid signs of bonhomie, India on Wednesday signalled that it is ready to resume trade with Pakistan, which the latter had unilaterally stopped almost two years ago. Also, India has placed the onus of restoring trade ties on Pakistan.

“India desires normal relations, including on trade with all countries, including Pakistan. Pakistan unilaterally suspended bilateral trade with India in August 2019. It is for Pakistan to review its unilateral measures on trade," minister of state for commerce and industry Hardeep Singh Puri said in the Lok Sabha on Wednesday while replying to a question on whether bilateral trade is likely to resume after ceasefire agreement was reached between both the countries.

When asked whether the government has received any kind of proposal from Pakistan, Puri answered in the negative.

After the Pulwama terror attack in February 2019, India withdrew the non-discriminatory market status it had unilaterally granted Pakistan in 1996, popularly known as Most Favoured Nation, and imposed a customs duty of 200% on all goods originating from Pakistan. India also suspended cross-LoC trade in April 2019 on receiving reports that these routes were being misused by Pakistan-based elements for funnelling illegal weapons, narcotics and fake currency. In August 2019, Pakistan announced suspension of bilateral trade with India. Partial relaxation was provided in September 2019 for trade in certain pharmaceutical products.

In calendar year 2020, India’s exports to Pakistan dipped 76.3% to $283 million while imports plummeted 96.2% to just $2.5 million.

A 2013 study titled ‘Normalizing India-Pakistan Trade’ by Indian Council for Research on International Economic Relations estimated the trade potential between India and Pakistan in the range of $11 billion-$20 billion.

A 2018 World Bank study estimated the trade potential at $37 billion. The two studies have suggested that this potential remains unrealized due to impediments in transport and transit facilities, non-tariff issues and restrictions on exports from India, among other factors.

The commerce ministers of India and Pakistan last met in January 2014 on the sidelines of a Saarc business leaders’ conclave in New Delhi. Both ministers reaffirmed the commitment of their governments to expeditiously establish normal trading relations and providing non-discriminatory market access on a reciprocal basis. Both sides decided to intensify and accelerate the process of trade normalization, liberalization and facilitation and to implement the agreed measures.

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Updated: 24 Mar 2021, 11:15 PM IST
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