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Thread: Some Updates:

  1. #1

    Some Updates:

    The Department of Plant Protection on 25-11-2016 (DPP) has `halted` import of cotton and other agriculture commodities,including vegetables,via the Wagah border crossing and Karachi port from India and issuing permits for future imports.

    Pakistan had imported 2.7m bales of cotton, about 40 per cent of India`s total cotton exports in 2015-16, due to crop failure that wiped off 0.5pc of the GDP (gross domestic product)growth.

    Note: A bale is 170kg.

  2. #2
    India-Pakistan trade relations

    Introduction:

    Trade relations are the best bet in forging a lasting relationship between India and Pakistan.

    If trade relations between the two countries are normalized, Pakistan will get access to a market of over 1.2 bn consumers and India will get access to a market of over 190 mn consumers.

    Context:

    Trade remains extremely vulnerable to political fluctuations.

    In 2012-13, trade between India and Pakistan totalled $2.4 billion, a fraction of the total trade of the two countries.

    In 2013, trade was blocked following cross-border firing.

    The restrictive trading regime has resulted in large informal trade flows, most notably through third countries such as Dubai.

    Informal trade flows are estimated to range from $250m to $3bn.

    One estimate puts trade via the Mumbai-Dubai-Karachi route to be 88% of the total informal trade, and the remaining as cross-border informal trade through the Amritsar-Lahore and Rajasthan-Sind border routes.

    The real breakthrough in Indo-Pak trade came in 2005 when a land route was opened at Attari for a limited number of commodities.

    Trade through sea routes also witnessed improvement after changes in the maritime protocol in 2005. These changes led to a decrease in freight rates.

    Barriers:

    1. Infrastructure constraints

    2. Transit rights:
    India has not allowed Pakistan to access Nepal, Bangladesh and Bhutan via its territory and Pakistan has not given transit rights to India to access Afghanistan.

    3. Financing and banking facilities for traders:
    In 2005, the Reserve Bank of India Governor and the Governor of the State Bank of Pakistan had signed an agreement to open branches of two Indian banks in Pakistan, and two Pakistani banks in India. This agreement has not yet been implemented.

    4. Limitations on goods that can be traded:
    India has granted MFN status to Pakistan in 1996. Pakistan has yet to offer it.
    There persists a negative list regime in both countries

    Trade potential:

    The trade potential between India and Pakistan is estimated to be ten to twenty times greater than its current levels.

    The potential only in mineral fuels (such as petroleum, coal, or natural gas) is expected to be $10.4 bn – $10.7 bn a year.

    Sector wise analysis reveals that bilateral trade is likely to increase from sectors such as textile, automobile, IT, BPO, health and entertainment, if these sectors are liberalised.

    Examples from the European Union and ASEAN show how good trade linkages can provide a foundation for regional peace. India and Pakistan need to do just that.

  3. #3
    Allow me to add a little!

    India and Pakistan are both members of the South Asia Free Trade Area (SAFTA).

    Total trade between the two countries averages only US$2.5 billion a year.

    Currently, Pakistan accounts for less than 0.5 per cent of India’s trade and India represents little over 3 per cent of Pakistan’s total foreign trade.

    (Possible) Conclusion:

    The complete liberalisation of trade between India and Pakistan will be a long and arduous process.
    Higher levels of trade will bring economic benefits to both countries, though Pakistan will clearly benefit most.

 

 

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