With the prospects of bilateral trade growing as a result of reciprocal efforts to dismantle the bottlenecks that India and Pakistan had built over years of hostility, the two countries have now decided to work towards improving air connectivity between New Delhi and Islamabad.

This was decided at the meeting of the two Commerce Secretaries here with both sides agreeing to set up a Joint Working Group before November 15 to work out a more liberalised regime of reciprocal bilateral rights for commercial flights to ensure economic viability of this air route. Presently, there is no direct connectivity between the two capitals and only Pakistan International Airlines offers direct flights between the two countries.

From the joint statement issued after the two-day deliberations, it appeared that considerable stress was placed on improving connectivity between the two countries. Both sides agreed that more trade traffic should be carried through the railways and to this end it was decided that the two Railway Ministries would hold joint coordination meetings on a monthly basis at appropriate levels.

Though bulk of trade traffic has been through the Wagah-Attari border, both sides acknowledged the need to strengthen infrastructure. The Customs Liaison Border Committee will meet monthly and also explore the possibility of organizing meetings between relevant importers and exporters at the border. Further, it was decided that the Land Customs Station would operate daily. Simultaneously, work is on to open the Munabhao-Khokhrapar land route.

Welcoming India’s decision to remove restrictions on inbound and outbound investments to Pakistan, the Pakistani delegation sought clarifications from Indian authorities on investment through “Government Route” and its implications. Both sides agreed that procedures would have to be simplified to enhance investor confidence across the border.

Non-Tariff Barriers (NTBs) – particularly on the Indian side which are a key irritant for Pakistani traders – were discussed at some length. According to Pakistan, certifications/ licensing/ lab testing/ are not the only NTBs but issues like delays in customs clearance, non availability of railway wagons for cargo transport, absence of direct flights or any problem which delays the clearance of goods with no end results or change, faced by importer/exporter is an NTB. Pakistan reiterated that concrete solutions of all such issues are crucial for ensuring market access in the Indian markets for Pakistani exporters.

Pakistan informed India that its offer to export up to 5 million cubic metres of gas per day for an initial period of five years was under active consideration. Also pending is a Bharat Heavy Electricals Limited offer to cooperate with Pakistan to set up 500-2000 MW capacity in coal/hydro or gas power plants, and meeting Pakistan Railways requirement of up to 100 locomotives.


Indo-Pak trade, silver lining in dark cloudDecember 17, 2012

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