ISLAMABAD – A world bank report has made startling revelations aboutPakistan India trade if the barriers ate removed from both sides.
India and Pakistan can increase their trade volume from the present $2billion to $37 billion if both countries do away with artificial tradebarriers, a World Bank report said on Wednesday.
India’s informal trade with Pakistan makes 91 per cent of formal trade, theWorld Bank said in its report ‘A Glass Half Full: The Promise of RegionalTrade in South Asia’. Many of these items are exported from India toPakistan through third countries, usually the United Arab Emirates.
Port restrictions offset the advantage of geographical proximity, whichshould lead to low transit costs and times between the states or provincesin northern India and Pakistan and thus boost trade. Pakistan allows only138 items to be imported from India over the Attari–Wagah land route.
India accorded Pakistan ‘most-favoured-nation’ status or non-discriminatorymarket access in 1996, under the World Trade Organization. However,Pakistan has not yet granted India the same status.
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The complex relations between India and Pakistan have adversely affectedbilateral trade as well as trade within the region, said the World Bank.The two countries account for 88 per cent of South Asia’s gross domesticproduct and 86 per cent of its population.
Under the South Asian Free Trade Area (SAFTA), both countries have reducedtariffs to a maximum of 5 per cent. India has reduced tariffs to zero onimports from the least developed countries. However, India (614 items) andPakistan (936 items) continue to maintain long lists of sensitive items,including items on which no tariff concessions are granted.
The preferential access granted by Pakistan on 82.1 per cent of tarifflines under SAFTA is also partially blocked in the case of India becausePakistan maintains a negative list comprising 1,209 items that cannot beimported from India.
