NEW DELHI, 2 August 2007 — India and Pakistan announced an ambitious goal yesterday to increase their trade by six times to $10 billion by 2010 and said they would work to ease barriers that have hit commercial ties between the old rivals.
They said they would allow their banks to open branches across the border, widen the trade basket, improve transport links and chip away at tariffs that have limited business and encouraged indirect trade and smuggling.
The decisions came at the end of two-day talks between top trade officials of the South Asian neighbors, their first in 16 months, as part of a larger peace process that was launched after they came to the brink of their fourth war in 2002. “We agreed on almost all the issues,” Pakistani Commerce Secretary Syed Asif Shah told a joint news conference.
Asked if he agreed with the target set by his Indian counterpart to push trade to $10 billion by 2010 from $1.7 billion in 2006/07, he said: “Absolutely ... the way we are moving ahead, I am very positive on achieving the result.”
Indian Commerce Secretary G.K. Pillai said Indian exports to Pakistan had doubled in fiscal 2006/07 over the previous year and imports from across the border had grown by about 70 percent during the same period.
A joint statement said the neighbors had set deadlines to allow two bank branches to be opened on either side to help traders. The application for which is to be processed latest by Dec. 31. This would facilitate transaction in local currencies and avoid charge that is paid for transactions through either American or European banks, sources said.
They had also exchanged lists to consider cutting tariffs and increasing the number of items that can be traded, restricted at present to about 1,800.
“In the final analysis, what is most important is trade is improving,” India’s Pillai said when asked if New Delhi had pressed Islamabad once again to grant it MFN status.
“As trade improves I think the climate for non-tariff barriers and others get removed, the economics will take care of itself,” he said. Pakistan’s exports to India stood at $323 million while Indian exports to Pakistan crossed $1 billion in 2005-2006.
Delegates, however, said the two sides failed to agree on Islamabad’s contention that New Delhi cannot export the long-grained aromatic basmati rice under the brand “Super.”
“Super basmati has evolved and being exported from Pakistan from day one and it is our belief Indian exports under this brand hurts our interest,” Shah said.
