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Karachi: Trade between Pakistan and India will more than double in two years if the nuclear-armed neighbours open their markets to each other following decades of mistrust, Pakistan’s commerce minister said. Pakistan’s exports to India are forecast to triple if trade barriers are eased, while imports are expected to double, Khurram Dastgir Khan said in an interview in Islamabad on Tuesday. He expects to hold talks with his Indian counterpart this month, building on a landmark meeting between Pakistani Prime Minister Nawaz Sharif and Indian leader Narendra Modi. If diplomatic dialogue resumes this year, then much of the trade negotiations have already taken place, Khan said. We don’t expect to have to negotiate very long. Three border wars and terrorist strikes have undermined efforts to boost trade between India and Pakistan, which account for about 20% of the world’s population. Easing travel restrictions and lowering tariffs between South Asia’s largest economies could boost trade fivefold to $12 billion by 2015, the World Bank said last year. Sharif in May attended Modi’s inauguration, the first Pakistani leader to do so since the states won independence from British rule in 1947. Sharif called their meeting a historic opportunity, while Modi said the two countries could move immediately to improve trade ties. He essentially, by accepting Modi’s invitation, accelerated the process at least by a year, Khan said of Sharif. If he hadn’t gone, both countries would still be sitting in each other’s capitals and thinking about when should we start talking again. Thawing relations While the nations share a 2,000-mile (3,200-kilometer) border and have mutually understandable languages, trade between them totaled $2.6 billion last year. That’s less than 0.5% of India’s combined commerce with other nations, government data show. Pakistan exported $370.2 million worth of goods to India in 2013 and imported $2.5 billion from its neighbour, according to data compiled by Bloomberg. While India is Pakistan’s sixth largest trading partner, Pakistan isn’t among the top 15 countries India buys and sells goods from, the data show. Khan said about 80% of trade between the countries is now open, and the talks are focused on abolishing a so-called negative list that restricts trade in certain goods. Pakistan’s agriculture lobby has been among the biggest opponents to a so- called Non-Discriminatory Market Access agreement the government is considering with India, he said. No discount We are not giving any new tariff discount to India, Khan said. We are saying that we treat India the same as any other country of the world. That’s all it means. Pakistan is seeking certain concessions from India, including lower tariffs on textiles and eased restrictions on travel visas, Khan said. Until 1949, two years after they split, India and Pakistan both accounted for more than 60% of each other’s trade. This dropped over the next few decades as the countries battled over territory along their borders. Relations thawed in the 1990s when India accorded Most Favored Nation (MFN) status to Pakistan, removing some non-tariff barriers, lowering customs duties and raising import quotas. While Pakistan agreed to follow suit in 2011, it has yet to do so. Other obstacles to trade include a lack of quality transportation links, according to the World Bank. ‘Win-win situation’ We support the opening of trade with India, Khurram Sayeed, vice president of the Federation of Pakistan Chambers of Commerce & Industry, said in a phone interview on Tuesday. It will be a win-win situation. Textiles and engineering will benefit the most from easier trade, providing access to India’s 1.2 billion-strong market and allowing purchases of relatively inexpensive Indian machinery, Sayeed said. Poor connectivity, crossborder conflicts and concerns about security have contributed to South Asia being one the least integrated regions in the world. In 2008, about 570 million people lived on less than $1.25 a day in South Asia, compared with with 385 million in sub-Saharan Africa, World Bank data show. Sharif’s government is debating how much to link the trade talks with progress in other areas of dispute with India, Khan said, without naming any specifically. One thing that may help the prospect for a breakthrough, he said, was changing the name of the proposal from Most Favored Nation to Non- Discriminatry Market Access.
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