Trade waits in hope as Pakistan mulls granting access to India.

NEW DELHI: Bilateral trade ties could get a big boost on Friday when Pakistan considers granting India non-discriminatory market access (NDMA) and opening up its market in return for concessional tariffs on a range of its goods.

The move comes after India shared a "non-paper" listing 100 sensitive items on which it will not offer concessional tariffs instead of 614, at present. In return, Pakistan is likely to allow 1,209 items that are currently banned from India besides opening up the land route for trade. Most of the items retained by India in the sensitive list are agricultural products, Indian officials said.

Pakistan commerce minister Khurram Dastgir Khan had told the local media in Islamabad two weeks ago that his government was considering granting the NDMA to India in return for significant reduction in duties imposed on its exports, especially textiles.

ET had first reported on March 10 that Pakistan was keen to grant the NDMA within the term of the Congress-led UPA government in India. "The consultation process with various stakeholders has been concluded and the Pakistani cabinet will consider the proposal tomorrow (Friday) to deliver on the promise it made to India to normalise trading relations ," a Pakistan government official said on Thursday on the condition of anonymity.

Currently, Pakistan allows only 137 items to be imported through the land route of Wagah-Attari border. It could consider opening up the land route to all items, the official said. "The final position will be clear only after the cabinet meeting as Pakistan government could ask for some amendments to be made to the proposal, to protect the sensitive sectors like agriculture or pharma," the Pakistani official said.

The official added that the latest proposal allows withdrawal of 1,209 items from the negative list and opening up the land route for all goods, albeit with a few safeguards. "The safeguards are bilateral in nature and designed mainly to protect the domestic industry in case of a surge of items from the other country," he added.

India and Pakistan had agreed to a road map on September 2012, according to which India would bring down its sensitive list under SAFTA (South Asian Free Trade Area agreement) to 100 tariffs line from 614 lines by April 2013, after Pakistan granted India MFN (most favoured nation ) status by December 2012. "Now they want to do it all together ," an Indian official said, adding that Pakistan will also reduce its sensitive list under SAFTA to 100 tariff lines from 840 in a phased manner over five years. This will be only the first step towards trade normalisation, said Nisha Taneja of Icrier, adding, "After this, the two governments will need to work on facilitating business-to-business connect, which currently happens via Dubai. Moreover, as the volume of trade will see a sudden surge, facilitating infrastructure will have to be put in place, as already the land border remains congested."

After a 16-month hiatus, trade ministers of the two countries had met along with the commerce secretaries in New Delhi in January to give a fresh impetus to the trade talks. Once the formal proposal comes from Pakistan, the commerce department will seek a no-objection certificate from the Election Commission in view of the model code of conduct which is in place ahead of the upcoming Lok Sabha elections.

Source : timesofindia.indiatimes.com