Share this story!            

India still won’t be major trading partner post-MFN: study

* Indian trade policy discourages import of goods in almost all sectors

By Sajid Chaudhry

ISLAMABAD: A trade research study has revealed that in the post-Most Favoured Nation (MFN) period, India still will not be a major trading partner of Pakistan.

However, exports from Pakistan to India are not expected to grow substantially within the existing framework of the Indian trade policy that discourages the import of goods, especially agriculture and consumer goods.

There have been wild estimates of informal imports from India and it is generally believed that the informal annual trade between India and Pakistan is about $2 billion. These estimates are based on the possible imports of Indian origin goods through a third country or countries by mis-declaring the origin of goods, as well as smuggling of consumer goods into Pakistan. However, these estimates are not based on scientific or concrete information. The informal trade of Indian origin goods from a third country is believed to consist of capital goods, raw materials and spices.

In the study “A Review of Pakistan’s Trade Relations With India” prepared by Dr Muhammad Zubair Khan, it has been estimated that in the post-MFN period India still would not be a major trading partner of Pakistan. It reveals that the Indian trade regime is riddled with non-tariff barriers. According to the Indian Trade Policy 2003-04, major non-tariff barriers identified are:

Labelling and Marking Rules for Imports: The rules stipulate that Maximum Retail Price (MRP), the generic name of products, month and year of entry in the trade channel, importer’s name and address and quantity in units must be carried prominently on the “Principal Display Panel” of packages. The requirement must be met before import clearance from Indian customs. This condition is applicable to imports of packaged commodities for retail sale.

The MRP indicated on a package should include all taxes local or otherwise, freight, transport charges, commission payable to dealer and all charges towards advertising, delivery, packing, forwarding and the alike, as the case may be. Various Indian states have their own separate regulations in the matter. There are 18 such types of legislations and it is accordingly difficult to know and comply with these regulations.

The Indian trade regime also makes it mandatory to comply with the Technical Standards of Quality and about 133 commodities are subject to mandatory compliance of such standards. Foreign manufacturers and exporters are required to registered with the Bureau of Indian Standards (BIS) to comply with these requirements.

India has in placed an agriculture permit system for the import of agri-products, plants and plant materials. The import of agriculture products is controlled by the Agriculture Ministry by means of a Phyosanitary Certificate issued in the country of exportation and inspection at Indian ports.

India maintains the highest import tariff on agriculture products to block imports into India, as the current tariff on potatoes is 30 percent, on onion 30 percent, on garlic 100 percent, on fruits 25 percent to 100 percent, on wheat 100 percent, on rice 70 percent, on sugar 1,000 percent and molasses 30 percent. India is using its anti-dumping measure quite frequently to over protect its industry. Till now India has imposed its Anti-Dumping Duty on about 200 items.

There is a general view that these measures have been adopted to provide un-just protection to the local industry and block imports. These duties are imposed in a non-transparent manner and it is because of these reasons that India faced several disputes at the WTO.

Home | National

Share this story!