India's non-tariff trade barriers seen hurting Pakistani exports By Khalid Mustafa

ISLAMABAD: Pakistan, which enjoys most favoured nation (MFN) status by India, remains unable to get its benefit because of the non-tariff barriers, which effectively block an increase in exports to its eastern neighbour, a senior official said.

Pakistan remains unable to get the advantage of MFN status given by India, Commerce Secretary Zafar Mehmood told The News. The non-tariff barriers effectively prevent a growth in Pakistani exports, he said.

Senior Pakistani officials say that although Pakistan has not given India the MFN status, the trade balance remains heavily tilted in New Delhi's favour. Islamabad allows the import of only a limited number of items from India, but that its trade regime remains flexible compared with New Delhi.

In principle, trade balance should have been in favour of Pakistan after it has been awarded the MFN status, but the restrictive tariff regime and non-tariff barriers have offset the impact of the MFN status, the commerce secretary said.

Mehmood said India's restrictive tariff regime remains a big issue. The removal of non-tariff barriers by New Delhi would help Pakistani entrepreneurs to perform better and increase their exports, he said.

Trade balance between the two countries remains in favour of India due to Pakistan's liberalised tariff regime and zero non-tariff barriers.

When drawn his attention towards Aman Ki Asha initiative, launched by the Jang Group and the Times of India Group, Mehmood said it remains a positive effort.

"No doubt there is a huge potential of trade between India and Pakistan, but it all depends upon New Delhi's commitment in removing the non-tariff barriers," he said when his attention was drawn towards the recent recommendations furnished by the Planning Commission's top panel of economists, led by Finance Minister Dr Hafeez Shaikh.

The panel said that there remains a potential of boosting Pakistan, India trade to $10 billion over the next few years, benefiting both the countries.

"This potential can only be exploited when a level-playing field is ensured by India by bringing its tariff regime at par with Pakistan and erasing non-tariff barriers," Mehmood said.

As far as the MFN status to India is concerned, Zafar said that this remains the part of the composite dialogue.

Every year, Pakistan increases positive items list under which it imports items from India as per the demand of the local importers. The government ensures that the import list does, anyway, hurt the local industry, he added.

Tuesday, June 15, 2010

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