INDIA and Pakistan are on their way to expanding trade relations in a big way. Pakistan has ultimately agreed to grant India the much-needed Most Favoured Nation status for purposes of business deals. India gave this facility to Pakistan a few years ago. Pakistan had been unwilling to reciprocate India’s gesture on various pretexts, but India continued to press for it.
The Commerce Secretaries of the two countries who met in New Delhi on Thursday discussed the issue closely with the realisation that both countries would be major beneficiaries if India was give the MFN treatment by Pakistan. This means the end of the Pakistani discriminatory regime for trade with India.
There is a massive trade potential between India and Pakistan, but it could not be realised substantially because of Islamabad’s unwillingness to accept India’s viewpoint on the MFN question. That is why the present trade volume between them is merely $2 billion. It has the potential to go up to over $14 billion soon. Their indirect trade through a third country may get reduced once the Pakistani decision on the MFN status to India is implemented. They have finalised a mechanism to enhance trade in petroleum products, and this means cross-border pipelines and an increased use of rail and road networks.
Growing trade relations between the two may lead to a better political climate in the subcontinent, helping to resolve their disputes in the days to come. There is need to hold more and more trade fairs which will not only increase bilateral trade but will also lead to increased people-to-people contacts, strengthening the peace constituency on both sides of the Indo-Pak divide. This will then reduce the tension between the two countries. Once the two major South Asian nations develop their stake in economic advancement through mutual trading arrangements, the atmosphere of distrust and ill will can become a thing of the past.
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