India- Pakistan Trade Potential

India intends to reduce its sensitive list to 100 selected items in trade, as Pakistan grants most favoured nation (MFN) or non-discriminatory market access (NDMA) status and opens Wagah-Attari land route for all items (currently 137 items allowed). Government of Pakistan must focus to negotiate reciprocal treatment with its Indian counterparts to achieve a level-playing field in trade on both sides. As a result, Pakistan will further give concessionary treatment to India along all products except items in Pakistan’s sensitive list under the SAFTA (South Asian free trade area) regime.

However, it has been pointed out that Pakistan cannot benefit from the reduction in the sensitive list by India for its export potential lies in products not protected by the latter. In fact, India’s para-tariffs and non-tariff barriers mainly restrict market access for Pakistani exporters, specifically of textile, agriculture and automobiles. Currently, Pakistan protects its local industries through the sensitive and negative lists. But, as soon as MFN or NDMA to India becomes operative, Pakistan will abolish its negative list.

Pakistan’s sensitive list contains only a limited number of products. This will not protect some sectors, particularly agriculture, pharmaceutical and automobile, from the flood of cheaper Indian products after the free trade between both countries.

Trade experts recommend that the government should strengthen regulatory bodies, such as National Tariff Commission and Pakistan Standards Quality and Control Authority, to protect its local interest before the trade normalization. Trade experts also suggest that the government should look for a level-playing field for Pakistan’s exports in the Indian market.

It is still time for mutual negotiation to understand the different trade issues and hurdles that are resisting mutual confidence and jointly fighting ground realities strategies.