Indo-Pak joint study group to explore combined export potential

Joint Study Group between India and Pakistan at the private sector level will be formed to explore the possibilities of co-ordinated export strategy between the two countries in potential areas. Four members from the private sector will be identified from each country to be part of the joint study group, which not only makes recommendations for enhancing the combined share of India and Pakistan in the world market but also the likely social costs, if any, of such arrangements incidental on business. Special focus would be on cooperation in the textile sector.

This was disclosed by Mr Tariq Ikram, Chief Executive, Trade Development Authority of Pakistan, at an interface with Indian businessmen organized by the PHD Chamber yesterday in the evening in Delhi. Referring to the scope of such arrangements in the textile sector, he pointed out that the combined market share of India and Pakistan in world textile exports in segments like garments, made-ups, towels, etc was far below that of China. A joint strategy for marketing such goods in the international market would be of great help to both the countries. There could be possibilities for forming joint ventures between the two countries in product lines that hold promise to make inroads into export of goods, where world market is increasing phenomenally.

Mr Ikram said that a proper mapping of goods that can be imported from each other’s country should be undertaken at the earliest since most of the goods that are traded between the two countries are through third countries, such as Dubai and Singapore. This increases the transaction costs. India can import directly from Pakistan products such as oil and oil products, cement, fishery products, fruits and vegetables, cut and uncut diamonds, engineering goods, etc. In this regard, he pointed out that a major breakthrough has been made in the case of import of cement from Pakistan to India through the Wagah Border. But there are still glitches relating to 100 per cent scanning of trucks that carry the materials, which result in idling of the vehicles for a long time. He expressed the hope that once the political process gains momentum, such issues would be resolved. “Similarly, resolution of issues like business visa, delays in issuance of visas, etc are part of a holistic package, where political considerations will play a crucial role,” he added.

The visiting dignitary responded favorably to a suggestion made by PHD Chamber President, Mr. Sanjay Bhatia that Pakistan should prepare a positive list for imports from India along with a few negative items that can be taken out of the free trading basket. He, however, said that such decisions can be taken only after discussing the issues with the stakeholders in Pakistan. He expressed the satisfaction that despite the adverse factors that existed, the official trade between the two countries had picked up from a few million dollars in early 90s to US$ 1.6 billion in 2006-India’s exports to Pakistan pegged at US$ 1.2 billion. Given that Pakistan has considerably enhanced its trade with Afghanistan, which hovers around US $ 700 million now, the two-way trade could increase considerably in the coming years.

Mr Ikram informed that he had handed over a list of non-tariff barriers that existed between the two countries, which come in the way of Pakistan increasing its export to India, to the Indian Government. In the case of import of mangoes and other fruits and vegetables, phyto-sanitary standards come in the way. Import of rice from Pakistan is also affected adversely.

Mr. Zafar Mahmood, Secretary, Ministry of Textile Industry, Pakistan underscored the need for India exporting to his country large quantities of cotton against the backdrop of India becoming surplus in that segment, with the introduction of Bt Cotton and improvement of the per hectare production. The other area that is open to cooperation is the ginning segment, where the quality of the ginning machinery manufacturing in Pakistan is very low as compared to India. There are about 1270 ginning mills in Pakistan and the number of such mills would be increasing year after year. These mills urgently require technology up-gradation that can be successfully done by India, either by exporting such machinery or setting up joint ventures in Pakistan for manufacture of the machinery. He suggested that a delegation of Ginning machinery manufacturers from India could visit Pakistan at the earliest to explore the market and hold parleys with their counterparts.

Earlier in his welcome address, Mr Sanjay Bhatia referred to the need for strengthening the South Asian Regional Cooperation, opening up the road route and easing the visa regime. Mr Ravi Wig, Chairman, Indo-Pak Task Force, PHD Chamber referred to the joint effort by two countries in textiles, R&D, sales promotion, etc. The current exchange rate-Pakistan currency getting devalued and Indian rupee getting appreciated –vis a vis dollar also provide scope for greater cooperation in export efforts.