If agreement takes place: Pakistani exports to India may rise to Rs6.949tr: report

KARACH: Pakistan needs to agree with India on trade. Resuming business with India clearly makes sense but Indian companies will need to be convinced for it, says American broadcasting organization ‘Bloomberg’.

Finance Minister Ishaq Dar said the new government will look seriously at trade matters with India. Dar’s statement should not be entirely surprising. His party has seen the benefits of Pakistan normalizing trade relations with India. The World Bank estimated in 2018 that if there is trade with India, Pakistan’s exports can increase by 80 percent, i.e. up to 6.9 trillion 49 billion rupees (about 25 billion dollars).

The problem is that Pakistan needs India much more than India needs Pakistan. The Indian economy is stable and it is very reluctant to open its markets to other developing countries that could put local producers out of business. Indians seem to have collectively decided that they can afford to ignore Pakistan. India’s economy is 10 times larger than Pakistan’s. In the 1970s, Pakistan’s per capita income was twice that of India’s. Today India has more than 50%.

Pakistani diplomats should wait until India’s general elections are over. If Modi is re-elected as most expect - it should be an opportune moment. Modi may be ready at that time. Modi gets along reasonably well with Nawaz Sharif. In fact, apart from Modi, Pakistan currently has very few potential advocates in India. Dar pointed out that Pakistani businessmen want.

Dar pointed out that Pakistani businessmen want trade with India to resume. India’s vibrant, profit-seeking private sector could be a powerful voice for closer ties if companies believe that normalization will be in their interests as well. According to German media, the new government of Pakistan may want to wait until the next general elections in India, which are scheduled to be held in April and May in different phases, before making a final decision. The Indian election results will be announced on June 4, in which Modi is likely to win for the third time.

It should be noted that on August 5, 2019, Pakistan suspended bilateral trade as a protest against the Narendra Modi government’s decision to unilaterally abrogate Article 370, which granted special status to Occupied Kashmir. So far, Pakistani leaders insist they will not restore ties until the decision is reversed. Foreign Minister Ishaq Dar said during a press conference in London that people from the business and commercial community were showing interest in reviving trade ties with India. “Therefore, we can seriously consider the restoration of trade relations with India,” he added. On the occasion of Pakistan’s National Day celebrations in New Delhi, Pakistan’s chargé d’affaires Saad Ahmed Waraich said that there is a need for a new chapter in bilateral relations between Pakistan and India. According to Voice of America, the business community welcomed it, while some quarters say that the restoration of trade relations should be on a level playing field.

Observers say that due to the establishment of a new government in Pakistan, changing conditions in the region and the insistence of world powers, Pakistan and India are considering the restoration of trade. According to Indian Express, in FY17, trade between India and Pakistan was 6 trillion 36 billion rupees (two billion 29 million dollars). In the current year, India has exported goods worth around 3.5 billion rupees ($1.10 billion) to Pakistan, including petroleum products, sugar and medicines. Imports from Pakistan are negligible. Two years ago, Pakistan had lifted the ban on life-saving medicines from India.