6th Round of India-Pakistan Commerce Secretary Level Talks in Delhi
Pakistan agrees to import more items from India
By: ASHOK B SHARMA On: Tue 15 of Nov., 2011 15:21 UTC
New Delhi, Nov 15 : India and Pakistan agreed to sequence to move towards full normalization of trade between the two countries.
Pakistan, which at present imports only 1900 items from India, agreed to prune its negative list for imports and ratify it by February 2012. Thereafter all items other than those on the negative list will be freely exportable from India to Pakistan.
In the second stage the negative list will be phased out. The timing for this phasing out will be announced in February 2012 at the time the List is notified and it is expected that the phasing out will be completed before the end of 2012.
The present political leadership in Pakistan has agreed in-principle to accord Most Favoured Nation (MFN) Status to India and has directed the country's commerce ministry to work towards normalization of trade relations with India.
The two-day talks between the Pakistan Commerce Secretary, Zafar Mahmood and the Indian Commerce Secretary, Rahul Khullar which concluded here on Tuesday agreed to enhancing the preferential trading arrangements between the two countries under the existing South Asia Free Trade Agreement (SAFTA) process.
Bilateral trade will be significantly expanded by extending tariff concessions on products of commercial interest. Both sides designated the Joint Secretaries in their respective Ministries of Commerce as Chief Negotiators for working on how to improve preferential trading arrangements under SAFTA.
Regarding Bt cotton seed imports from India, it was noted that Pakistan has constituted a committee to examine this issue. The first step would be to permit limited import solely for the purpose of field trials in Pakistan.
On trade in electricity a broad understanding has been reached on possible grid connectivity between Amritsar-Lahore to enable trade of up to 500 MW of power. The Central Electricity Authority and Power Grid Corporation of India Limited and Power System Operation Corporation Ltd from the Indian side are discussing with the National Transmission and Dispatch Company Ltd of Pakistan to work out the optimal technical solutions for grid connectivity between both countries as per the agreed terms of the first meeting of the Joint Group of Experts held on October 20, 2011.
The second meeting of the Experts is scheduled to be held in Islamabad in the first week of December, 2011. It is expected that the Group of Experts will reach a final understanding on grid connectivity at this meeting.
Regarding trade in petroleum products, it was agreed that the Joint Group would hold its first meeting before January 2012.
On the issue of non-tariff barriers, the Pakistan side furnished a specific list of non-tariff barriers, as perceived by their business community, for sectors such as textiles, leather, cement, agricultural produce and surgical instruments. It was agreed that these would be comprehensively examined on the Indian side and interactions would be arranged between the concerned regulators and Pakistan's business community to discuss and find solutions for all issues raised.
Earlier a Joint Working Group meeting was held in August, 2011 in this connection, co-chaired by the Joint Secretaries of the Commerce Ministries of the two countries. Feedback has also been received from the "Nuts and Bolts of Trade Facilitation", organised in Delhi by FICCI on September 29, .2011 which was participated by businessmen from both sides.
It was agreed that the JWG would continue interaction to address any clearly identified sector-specific barriers to trade. The Joint Secretaries of the Commerce Ministries of two countries would convene focused meetings on these issues, as necessary. A delegation comprising officers from various regulatory bodies from India would visit Lahore and Karachi in the first quarter of 2012 to provide necessary outreach so that businesspersons in Pakistan can be better informed about India's trade regulations, standards and labelling and marking requirements.
Both sides agreed to initiate the process of a limited MRA as a formal mechanism to address the issues of standards and conformity assessment.
It was agreed that there was a need to institute a mechanism for redressing grievances arising from clearance of trade consignments at land, sea and airports. Pakistan side proposed that an agreement be concluded between both countries to address the concerns of the business community. Indian side agreed to consider this proposal and undertake further consultations in this matter.
Both sides reviewed the progress made in developing physical infrastructure for trade through the Attari-Wagah land route. It was agreed that the Joint Technical Group overseeing the work would meet at the end of November 2011 and there would be follow-up monthly meetings in December 2011 and January 2012. It was also agreed that all infrastructure construction would be completed and fully operational no later than the end of February 2012. This timeline would coincide with the announcement of the Negative List for imports. The new trading regime will thus be applicable to all trade through the land route after the infrastructure at Attari-Wagah is commissioned.
On trade facilitation, both sides appreciated the work done by the Customs Liaison Border Committee (CLBC) in resolving the operational issues at Wagah-Attari. The CLBC was mandated to undertake a comprehensive overview of the requirements to ensure expeditious clearance of goods including harmonization of customs procedures and to make recommendations to the Joint Working Group on Economic and Commercial cooperation.
The Sub Group on Customs Cooperation met in New Delhi on August 24, 2011. It discussed issues relating to harmonization in customs procedures, facilitation of trade consignments, and exchange of trade data and information. Nodal customs officers on both sides have been notified. They would maintain direct contact on all matters pertaining to delays in trade consignments, trade document requirements, and other matters of customs cooperation.
The Pakistan side handed over a draft of the Customs Cooperation Agreement. Both sides agreed that best efforts would be made to finalise the Agreement by January 31, 2012.
Both sides realized that there is a potential for cooperation in Information Technology, however, lack of information regarding capacity of Pakistani IT companies, difficulty in availability of visa for technical staff and absence of banking facilities has hindered cooperation in IT between the two countries. It was agreed that NASSCOM in coordination with Pakistan Software Export Development Board would facilitate a road show for Pakistani IT companies at Bengaluru, Hyderabad and other Indian IT Hubs in February, 2012.
Both sides also agreed to have business-to-business interactions. It was noted with satisfaction that India Trade Promotion Organisation (ITPO) and Trade Development Authority of Pakistan (TDAP) had entered into a MoU for collaborative efforts to promote bilateral trade. The possibility of FIEO of India mounting a trade exhibition at Lahore Expo was also explored; this could be done in February, 2012. TDAP of Pakistan intimated that they would like to organise a lifestyle exhibition in New Delhi in March, 2012 and invited Indian participation at the Agro-Processing Value Addition Exhibition scheduled to be held in Karachi.
Both sides agreed that the present visa regime for businesspersons was a significant barrier to the rapid expansion of trade. It was noted that the Interior Ministry of Pakistan and India's Ministry of Home Affairs had reached a broad understanding to put in place reciprocal arrangements which shall substantially liberalise the visa provisions for business persons. Discussions were held on how there would be further improvements on the understanding already reached. It was agreed that best efforts would be made by the respective Commerce Secretaries to push for further liberalisation of the business visa arrangements. However, with or without enhanced provisions, both sides would work with their respective authorities to ensure that the liberalised visa provisions already agreed to are put in place before the end of December, 2011.
The issue of promotion of bilateral investment was discussed. It was agreed that both sides would continue efforts to remove impediments to such investments.
On the opening of bank branches in each other's countries, it was agreed that the Central Banks of both countries need to further discuss this issue. Actual dialogue needs to take place through a bilateral visit.
The process for improvement in India-Pakistan trade relations began from the dialogue process in 2004. The 5th round of Commerce Secretary level talks took place in April 2011 which led to setting up of many joint groups and sub-groups. Makhdoom M Amin Fahim was the first Commerce Minister of Pakistan to visit India on September 28, 2011 after a gap of 35 years. Fahim laid the foundation for better trade realations with India. During the 17th SAARC Summit held at Maldives (November 9-11, 2011), the political leadership on both sides directed that the two sides also work on enhancing preferential trading arrangements as part of the shared vision to significantly expand bilateral trade. Pakistan recently decided to accord MFN Status to India, which the latter accorded to the former 15 years ago.
The 7th round of Commerce Secretary level talks between the two countries will take place in Pakistan in April/May, 2012.
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