As “Dividends”, a two-day economic conference organised under the auspices of Aman Ki Asha, opens today, it bears testimony to the giant strides Pakistan-India trade has taken in the last one year. Aman Ki Asha – a joint initiative of the Jang Group and the Times of India – is trying to play its role in helping the two countries move past the ‘impossible’ and remove some of the key barriers obstructing bilateral trade. Leading Indian business tycoons will participate in the conference and engage with their Pakistani counterparts, providing both a “rare independent platform where the private sector and government representatives can interact and discuss issues that are vital to promoting economic collaboration,” – considered by many as one of the most important drivers for peace and stability in the region. The last one year has already seen Pakistan and India cross many important stepping stones on the way to full-spectrum trade ties. A year ago, the two countries announced a roadmap to boost trade relations. Exactly one year later in April 2012, the trade gate at the Wagah-Attari border was formally opened and New Delhi announced allowing direct Pakistani investment in India. And that’s not all: both countries have shown immense flexibility on previously intractable issues, with India promising to resolve the issue of non-tariff barriers and Islamabad granting most favoured nation status to India. Pakistan has also decided to switch to a negative list regime to trade with India, with only 1209 items that will not be importable from India to Pakistan to protect its local industry.
All of these moves have taken place because of what seems to be a potential paradigm shift in bilateral ties and the adoption of the “India-China model” in negotiating Pakistan and India’s sensitive relationship. This model entails focusing on scaling up trade while resolving outstanding issues in a “step-by-step” incremental manner. After months and months of work by the commerce ministries in both countries and the critical push by the respective business communities, a vision seems to be progressing, the vision simultaneously pursuing both trade and discussions on contentious issues.
This new model could be a potential game-changer in an accident-prone relationship as it envisages a pragmatic approach to keep working at enhancing economic ties that benefit both countries while taking a long-strategic range view to resolve complex outstanding issues. The Confederation of Indian Industries has predicted that trade between the two countries may touch $10 billion by 2015, if trade and investment barriers are removed. To achieve this, economic and political leaders have to keep pushing to strengthen the fragile peace process and keep interacting with one another to highlight the difficulties and suggest solutions. “Dividends” is yet another effort to nudge the two countries to keep the economy high up on the agenda.