Trade talks between India and Pakistan are likely to get back on track as soon as the political situation normalises.
Commerce Ministry officials from both sides met last month informally, to discuss the next steps that could be taken to improve bilateral trade relations when they get the nod from their respective political bosses.
Negotiations to normalise trade ties between the two countries launched in January 2011 were suspended early this year following the killing of soldiers at the Line of Control.
Sensing a gradual dissipation in political tension, a small team of officials from the Commerce Ministry met their Pakistani counterparts in Islamabad last month to take stock of the state of affairs.
“We were pleasantly surprised to find that the Pakistani side has done the ground work for allowing most imports from India through the land route which was to be the next step in the trade normalisation process,” a Commerce Ministry official told Business Line .
The Pakistani side informed the Indian officials that they were just waiting for the political signal and would come up with the necessary notifications as soon as they got the required nod, the official added.
Currently, Pakistan allows only 137 items to be imported through the Attari land route. The rest has to go via the sea route to Karachi through Mumbai and Dubai, increasing costs several fold.
The recent meeting between Prime Minister Manmohan Singh and his counterpart Nawaz Sharif in New York has infused hopes that a formal round of talks between the Commerce Secretaries may be scheduled soon.
“We are hopeful that we will be able to meet soon formally and take further steps in the trade liberalisation process,” the official said.
Both sides have already made considerable concessions for each other as part of the liberalisation process to push up bilateral trade currently at about just $2 billion.
Pakistan now allows over 6,800 items from India, up from about 2,000 items earlier. India, on its part, has agreed to eliminate or reduce tariffs on 234 items from Pakistan under the South Asia Free Trade Agreement of which both countries are signatories.
The country, however, is yet to extend the Most Favoured Nation (MFN) status to India which basically means treating it on par with its other trading partners by allowing import of all items. Pakistan continues to ban over a 1,000 items from across the border although India had extended it the MFN status way back in 1995.
“Pakistani officials said that MFN status, too, would be bestowed on India in due time but Commerce Secretaries have to meet formally for the matter to progress,” the official said.