CHANDIGARH, 28 July 2005 — India and Pakistan opened bilateral trade across their land border for the first time in 50 years this week, marking yet another improvement in relations between the two South Asian rivals.
Trucks were being loaded with onions and tomatoes in India yesterday, waiting to be ferried across the frontier.
“We are very happy. Trade by road will boost our revenues and also our farmers will not face a glut,” said vegetable trader Davinder Kumar as he supervised the loading.
The first of the Indian trucks laden with garlic and onion rolled into Pakistan on Monday through the Wagah border post, on the road between the Indian city of Amritsar and the Pakistani city of Lahore. Indian Trade Minister Kamal Nath said more steps would be taken to boost bilateral trade.
“This is a first step in the opening of land trade routes,” he told Reuters. “I hope more such routes can be opened.
“This has enormous significance. It can provide greater access to many central Asian countries and lead to greater economic engagement between India and Pakistan,” Nath said.
Officials estimated bilateral trade between India and Pakistan at around $380 million in 2004.
However, barriers to commerce cemented by more than half a century of hostility still forces companies into costly detours via third countries such as Afghanistan or the United Arab Emirates.
Tires, for instance, were until recently exported from Amritsar to Lahore — potentially a 90-minute drive across the border — through Dubai, Afghanistan and Iran.
These indirect shipments are said to have been worth around $1 billion in 2004. In addition, there is a flourishing smuggling racket across the border, with rice and salt coming into India and other items going to Pakistan.
Relations between the nuclear-armed neighbors have warmed in the last 20 months after they stood on the brink of a fourth war in 2002 because of the Kashmir dispute.
The peace initiative has moved slowly but talks are being held on a range of issues. The two nations launched a historic bus service in April to help unite people from across the divided Kashmir region.
The Associated Chambers of Commerce and Industry, an industry lobby group, has predicted two-way trade could reach $10 billion within five years of signing a free trade agreement.
Earlier this year, the two nations agreed to trade in four vegetables - garlics, onions, tomatoes and potatoes - and in livestock - commodities in short supply in Pakistan.
India will import lentils, cotton, sugar and dry fruits.
