Internews/Lahore

Pakistan and India have shown their readiness to upgrade infrastructure on both sides of the border and remove red tape and technical barriers to trade from the Indian side, the top New Delhi envoy to Islamabad has said.

Indian High Commissioner to Pakistan T C A Raghavan said this while exchanging views with Pakistani businessmen of the Lahore Chamber of Commerce and Industry (LCCI) and they discussed at length the issues being faced by the two countries in improving trade that has remained stagnant for the last three years, The News reported yesterday.

Raghavan said that the relations between the two countries have improved. He cited the recent successful visit of the Pakistani Punjab chief minister to India, increasing people-to-people contacts between the two countries and close interaction between the businessmen on both sides as evidence of better ties.

“Trade between the two countries was virtually insignificant till 2003 when the sharp focus of the diplomats of the two countries was political issues,” he said, adding that trade was given importance in 2007.

The Indian high commissioner said that the increase in trade between India and Pakistan slowed down mainly due to issues related to harmonisation and infrastructure bottlenecks. “It was not due to the non-tariff barriers erected by the Indians,” he said.

To resolve these issues, India and Pakistan have agreed to arrange periodic meetings of the Customs officials. It has also been decided that the Railways authorities from the two countries will regularly interact to ensure smooth and adequate supply of rail wagons for transportation of goods, he said.

Raghavan said that soon a mechanism will be evolved by the officials of the two countries to resolve contract enforcement issues from the businessmen. “We have largely resolved the visa issue,” he said, adding that fine tuning of visa process and further simplification of documents required in visa applications is in process.

He said that there are minor issues of red tape in the Indian bureaucracy, which is being addressed. This, he said, looks like a non-tariff barrier to trade, adding that as the Indian high commissioner his primary objective is to facilitate the export of Pakistani goods to India.

“Durable long-term bilateral trade is not possible if the businessmen and manufacturers on the two sides of the border are not equally benefitted. Pakistan enjoys competitive advantage in several fields,” he said, quoting textiles as one sector. Pakistan will benefit from the penetration that Indians are likely to make in the Association of Southeast Asian Nations Asean and other regional markets, he said.

Talking about fears of certain businesses on trade with India, he said India is a more industrialised country but its business circles faced same fears when trade with China was opened.

“Fifteen years ago, India-China trade was close to zero,” he said, adding that now it is nearing $100bn per annum. India currently runs a trade deficit of $40bn with China.

However, he said, the machines and equipment that India imports from China are much cheaper than other global sources. This in a way saves foreign exchange for India, besides upgrading its industries and economy.

Aftab Vohra, chairman of the LCCI Standing Committee on Trade with India, said that there are over 1,000 items that Pakistan has placed on the negative list from India.

However, he said, there is no official restriction on any Pakistani product to enter Indian market but most of the time when a new item is exported to India, the Customs authorities there do not clear them, as they contend that import of that item is not allowed from Pakistan.