Modi seeks full trade normalisation with Pakistan

Pitching for strong trade ties with Pakistan, Prime Minister Narendra Modi also maintained a tough posture on terrorism in his meeting with his counterpart Nawaz Sharif. In the bilateral meeting held here on Tuesday, Modi said that India is prepared to go for full trade normalisation with Pakistan based on the road map already agreed to by both countries.

At the same time, Modi asked Sharif to speedily try and punish those found guilty in the 26/11 attack on Indian Parliament and also prevent its territory from being used to spread terror against India.

“Both Prime Ministers agreed that Foreign Secretaries will remain in touch and explore how to move forward,” Foreign Secretary Sujatha Singh said in a press briefing after the bilateral meeting.

According to the trade liberalisation road map of September 2012, Pakistan will have to extend the Most Favoured Nation (MFN) status to India, which is now referred to as the more politically acceptable Non-Discriminatory Market Access (NDMA) status.

India, on the other hand, has agreed to bring down import duties to five per cent on all Pakistani products except just 100 items under the South Asia Free Trade Agreement framework.

Sharif, in his address to the media, however, did not reveal his cards on the MFN issue. “I stressed to Prime Minister Modi that we have a common agenda of development and economic revival, which is not possible to achieve without peace and stability in the region. I urged that together, we should rid the region of instability and insecurity, that has plagued us for decades,” Sharif said.

NDMA/MFN status refers to treating a trading partner the same way as any other partner by allowing trade in all commodities. India had extended the MFN status to Pakistan in 1996.

Since the trade normalisation process started three years back, Pakistan increased the number of items allowed from India to about 6,800 from 2,000. However, it continues to ban about 1,209 items in the area of agriculture, pharmaceuticals, textiles and automobiles. India-Pakistan trade, at present, stands at about $3 billion, which could touch $10 billion after restrictions are removed, as per estimates made by CII.

On terrorism, Modi said that Pakistan must abide by its commitment to prevent its territory and the territory under its control from being used to spread terrorism in India.