Pakistan in a rush to seal deal for more market access before polls

NEW DELHI: Pakistan is keen to seal a deal within the tenure of the Manmohan Singh government in India to grant the country greater access to its market in return for lower duties on its exports. The move is aimed at ensuring that the talks on trade normalisation between the two sides over the past few years do not go back to the drawing board with the change of government in India, people familiar with the matter said.

A formal proposal on non-discriminatory market access (NDMA) - a nomenclature chosen by the Pakistan government to avoid political ramifications at home of giving India the most-favoured nation (MFN) status - is expected within the next few weeks, a senior commerce department official said.

The NDMA will allow India to export 1,209 items that are currently on Pakistan's negative list. In return, Pakistan wants India to prune its sensitive list under South Asia Free Trade Area (Safta) goods agreement to 100 items from 614.

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 that is in place ahead of the upcoming general elections, the official said.

"Pakistan has communicated to us that they would like to grant us the non-discriminatory access in the present government's tenure itself," the official said. "Now they want to think of doing a comprehensive package, which will include both NDMA and preferential trade arrangement."


Pakistan's commerce minister Khurram Dastgir Khan reportedly told local media in Islamabad last week that the government was considering granting the NDMA to India if India made prominent reduction in duties imposed on Pakistani imports, especially textiles.

India and Pakistan had, in September 2012, agreed to a road map, according to which India will bring down its sensitive list under Safta to 100 tariff lines by April 2013, after Pakistan granted India MFN status by December 2012. "Now they want to do it all together," the official said.

Pakistan will also reduce its sensitive list to 100 tariff lines from 840 in a phased manner over five years, according to the road map.

"Whatever we have been talking to them for the past three years is as per the current Cabinet's authorisation, which expires with the present government. If they want to do it with the next government, it will be like starting the process all over again," the official said.

Nisha Taneja of Icrier said, "There is a very strong likelihood of Pakistan sending a proposal on NDMA in the next few weeks. They are holding a round of consultations before announcing it. It is a whole process of building credibility once again."

According to a study by Taneja, India and Pakistan can boost their bilateral trade from the current $2.60 billion a year to an estimated $19.8 billion.

After a 16-month hiatus, trade ministers of the two countries along with commerce secretaries met in Delhi in January to give a fresh start to the trade talks. Pakistan had agreed to work on a reciprocal non-discriminatory market access in place of MFN status. India and Pakistan also agreed to open the Wagah-Attari land route round the clock for trade and allowing movement of container cargo as the first steps towards normalisation of trade.