ISLAMABAD – Pakistan on Thursday said it would re-start work on improving trade ties with India when the Foreign Affairs secretaries from the two states meet in Islamabad next month.
Pakistan had pledged to grant India MFN (Most Favoured Nation) status by the end of 2012, meaning Indian exports would be treated the same as those from other nations, but so far has not done so. India granted Pakistan the MFN status in 1999.
“When the dialogue process resumes, we hope to build on the work already done in this regard,” Foreign Affairs Secretary Aizaz Ahmad Chaudhry told AFP at a weekly press briefing. The foreign secretaries of Pakistan and India are set to meet in Islamabad on August 25.
The proposed meeting, announced by the Foreign Office on Wednesday, comes after Prime Minister Nawaz Sharif held talks with his Indian counterpart Narendra Modi in New Delhi following his inauguration in May. Aizaz said there were number of issues on both sides for normalising bilateral trade which included making sure that vulnerable sectors are protected and the issue of the non-tariff barriers in India and the issue of imbalance of trade and certain other infrastructure-related issue.
The MFN status will mean India can export 6,800 items to Pakistan, up from around 2,000 at present, and the countries aim to lift bilateral trade to $6 billion within three years, officials have said. Trade between the two countries is presently around $2.5 billion, with Indian exports accounting for $1.75 billion, according to the Karachi Chamber of Commerce and Industry.
A further $3 billion is thought to be channelled through Dubai, almost all of it in Pakistani imports, though the business community believes that if Pakistan grants India the MFN status the imbalance could change. Pakistan and India have directed their peace efforts towards ‘trade diplomacy’ in a bid to build enough trust to tackle thornier issues that divide them, such as the Kashmir issue.
In August 2012, India lifted a ban on foreign investment from Pakistan except in defence, space and atomic energy in a step designed to build ‘goodwill’ amid the renewed push for a peace settlement.