India-Pakistan Trade: A Roadmap for Enhancing Economic Relations

[Aepsilons]

You will be happy to know that the trade has increased even more since your figures in the graph:

Trade between India and Pakistan surges 21% to $2.4 billion - The Express Tribune

If we can directly trade what we are routing through UAE (more than 4 billion, probably around 5 - 6 billion today)....we can get around 8 billion+ in trade between the two countries without much effort and increase it from there.

Pakistan however is very closed to Indian manufactured goods....yet there is still a 4:1 trade balance in favour of India...so I would assume more direct trade will produce a figure of say 2 billion exports from Pakistan to India and 8 billion in other direction in the next few years (if direct trade is allowed to happen).

The paradigm of connection is key in this context. I believe that with Japan and China's drive in both India and Pakistan, respectively, in developing critical infrastructure in the two nations -- we can see further enhancement of trade , region wide.

 

[PARIKRAMA]

You will be happy to know that the trade has increased even more since your figures in the graph:

Trade between India and Pakistan surges 21% to $2.4 billion - The Express Tribune

If we can directly trade what we are routing through UAE (more than 4 billion, probably around 5 - 6 billion today)....we can get around 8 billion+ in trade between the two countries without much effort and increase it from there.

Pakistan however is very closed to Indian manufactured goods....yet there is still a 4:1 trade balance in favour of India...so I would assume more direct trade will produce a figure of say 2 billion exports from Pakistan to India and 8 billion in other direction in the next few years (if direct trade is allowed to happen).

Yes you are correct but most folks believe the prospective potential is over $40 Bn quoted by Dr Mohsin S Khan sir way back in 2012

Thats like almost 17 times of that figure of $2.4 Bn.. Imagine the potential versus where we are standing..
Source: Pak-India trade still a fraction of $40 billion potential - The Express Tribune

I quote
Despite government’s greater flexibility to normalise trade ties with India, bureaucratic hurdles, high Indian import tariffs and lack of infrastructure are obstacles in expansion of bilateral trade having annual potential of $40 billion, says a former senior official of the International Monetary Fund.

In the medium term, studies show that Pak-India trade can easily be multiplied 20 times, said Dr Mohsin S Khan, former director of the IMF. He was speaking at a seminar on “Expanding India-Pakistan Trade” organised by Pakistan Institute of Development Economics here on Monday.

 

[Nilgiri]

Yes you are correct but most folks believe the prospective potential is over $40 Bn quoted by Dr Mohsin S Khan sir way back in 2012

Thats like almost 17 times of that figure of $2.4 Bn.. Imagine the potential versus where we are standing..
Source: Pak-India trade still a fraction of $40 billion potential - The Express Tribune

I quote
Despite government’s greater flexibility to normalise trade ties with India, bureaucratic hurdles, high Indian import tariffs and lack of infrastructure are obstacles in expansion of bilateral trade having annual potential of $40 billion, says a former senior official of the International Monetary Fund.

In the medium term, studies show that Pak-India trade can easily be multiplied 20 times, said Dr Mohsin S Khan, former director of the IMF. He was speaking at a seminar on “Expanding India-Pakistan Trade” organised by Pakistan Institute of Development Economics here on Monday.

Yes this requires full opening up of trade especially from Pak side. It wont happen because a) Kashmir and b) they feel their local industries will collapse.

The paradigm of connection is key in this context. I believe that with Japan and China's drive in both India and Pakistan, respectively, in developing critical infrastructure in the two nations -- we can see further enhancement of trade , region wide.

China is playing a big role in India as well...it is just not talked about so much. Pakistan needs a quantitative paradigm increase in its overall investment rates (from every country possible) to compete with India more strongly with open trade barriers...so it is no surprise they are very wary in certain areas till they develop what they see is their potential in these industries locally. Problem is the opportunity foregone in this wait, especially if the results do not materialise to the level they are anticipating quite optimistically currently.

 

[Super Falcon]

Trade is good but it benefit india more than us and whatever pak have benefit mr sharif will be party to it so for pak nothing in it

 

[Aepsilons]

Trade is good but it benefit india more than us and whatever pak have benefit mr sharif will be party to it so for pak nothing in it

The argumentation also lies in the premise that economic integration may stave off militarist bravado of both sides, given the effects of war on an integrated economic apparatus. Case in point the relations between Japan and China. Both may have territorial claims, however, both are economically intertwined.

Ultimately economic integration is the prerequisite to eventual political integration. This , if realized, can lead to a truly harmonious South Asian Region, and the growth of India and Pakistan as major drivers for global economy.

 

[PARIKRAMA]

A case in point where i dont think anyone can claim its benefiting only Pak PM NS or his family holding benefits..

The Electricity diplomacy. This is from Power Trading Corporation India's plan for Cross Border Electricity Project.
This presentation was given to Indian government by PTC management of how they can address the energy diplomacy and mutually benefit both the nations.

Notice the proposed interconnection of 500 MW under discussion

As seen from the above slide under power supply position, there is a gap based on demand supply mismatch and its almost 19% with peak deficit of almost 27%

As seen the transfer is in 2 phases of 500 MW each. The line is suppose to be between Amritsar and Lahore.

As seen the ability of India to supply with which Pakistan can bridge its deficit can be used based on requirements and help build up cooperation which cab then be cloned in other avenues.

Look at the saving for Phase 1 its Rs 4653 Crs or almost $685 Mn/year
When phase 2 comes in with 1000 MW total, this will create double the savings or almost $1.4 Bn/year

Imagine that much amount being used by GOP in other sectors in the economy.. The resultant growth even if its just few basis points can help lead to greater growth in coming years and prosperity for people of Pakistan.

The linking seems to be planned via Lahore Amritsar and and other one is Mundra- Karachi

The commercial arrangements enable GOP to be a partner or via a public body to take part ownership in this project. The other structure can be purely commercial using tolling or paying for fuel.


@Nihonjin1051 @WAJsal @Slav Defence @Icarus @others

See how energy diplomacy helps us address one of the fundamental requirements in our daily lives... How such small measures helps us build confidence between both the nations via CBMs ..

The potential is limitless...We just need to take small small steps..

 

[SQ8]

This is how the security establishments of both countries see this.

Short-Term Measures

• Easing restrictions on visas, specifically, allowing multiple entry visas for businessmen, eliminating requirements to report arrival to the police at each place of stay, eliminating city-specific visas, and speeding up the approval processes; SECURITY RISK!, NO!

• Signing a protocol to permit Indian/Pakistani ships to lift cargo for third countries and eliminating the reciprocal requirement that ships touch a third-country port before bringing in imports. The third-country port restriction particularly affects trade of high-bulk, low-value goods, such as coal, tar, and cement, making their transportation via sea commercially unviable. Also allowing sea shipments in addition to the current Mumbai-Karachi route;SECURITY RISK!, NO!

• Eliminating the reciprocal requirement that rail wagons carrying goods across the border return empty, increasing the frequency of rail traffic, and improving the coordination between the railway authorities. Businessmen have suggested restarting the old Sindh-Rajasthan rail link;SECURITY RISK!, NO!

• Opening additional border crossings, increasing traffic frequency on the road route through the Wagah border (connecting the major cities of Amritsar and Lahore) and the Khokhrapar-Munabao route, and allowing increased traffic through the Srinagar-Muzzafarabad route, which is currently restricted to only four trucks from either side crossing once a week;SECURITY RISK!, NO!. DONT ASK WHY!

• Opening additional bus routes. In the past a commitment was made to increase the frequency of the cross-Kashmir bus service via the Srinagar-Muzzafarabad route. However, the bus service is only weekly and restricted to passengers who have relatives on the other side of the border; SECURITY RISK!, NO!. DONT ASK WHY!
  
  
• Increasing air links between the two countries. Currently, the only air links agreed are Lahore–New Delhi, Karachi– New Delhi, and Karachi-Mumbai. There is no direct air link between the two capitals (Islamabad–New Delhi);SECURITY RISK!, NO!. DONT ASK WHY!
  
  
• Increasing the number of customs posts where “sensitive” items can be cleared and eliminating requirement for 100 percent verification; SECURITY RISK!, NO!. DONT ASK WHY!
  
  
• Allowing branches of Indian and Pakistani banks to operate in the other country and allowing banks in one country to hold accounts in the currency of the other.SECURITY RISK!, NO!. DONT ASK WHY!

Medium Term Measures

• Both Pakistan and India should mutually agree on as limited as possible about the lists of sensitive items. Both Pakistan and India should apply MFN duty rates to items on the sensitive lists.SECURITY RISK!, NO!. DONT ASK WHY!

• India should significantly lower tariff rates for goods of particular interest to Pakistan (e.g., textiles, leather, etc) and remove non tariff barriers. In return, Pakistan should reciprocate by providing MFN status to India and abolishing the list approach of differentiation.SECURITY RISK!, NO!. DONT ASK WHY!

• Pakistan should allow transit trade from India. WTO rules require Pakistan to allow transit trade for all goods to and from third countries (including Afghanistan and the countries in Central Asia). Pakistan views this as problematic because of the risk that goods “dumped” by India in Afghanistan will reenter Pakistan, and as such transit trade from India has been restricted.SECURITY RISK!, NO!. DONT ASK WHY!

• Energy trade between the two countries should be facilitated. The greatest benefit would occur in the sphere of energy cooperation. To start with, the countries could agree on the gas pipeline between Iran and India passing through Pakistan. This would assure India of a regular supply of gas, and Pakistan would earn transit fees (estimated at about $800 million to $ 1 Bn a year), in addition to meeting its own energy needs.SECURITY RISK!, NO!. DONT ASK WHY!

• In the longer term, the development of joint energy grids, particularly in the Punjab-Haryana and Sindh-Rajasthan regions, would create efficiencies through economies of scale and lower energy costs for both countries.RESPECT AT RISK!, NO!. DONT ASK WHY!

• Both countries should also allow trade in information technology (IT). Despite India being well ahead of Pakistan in this field, both countries could engage in mutually beneficial business-to-business links. Since IT trade does not involve movement of goods, it would be easier to move ahead quickly in this area. For example, Pakistan could allow large Indian IT companies to set up call centers and other IT-related firms, taking advantage of the existing (and growing) English-speaking workforce in Pakistan.SECURITY RISK!, NO!. DONT ASK WHY!

• Both countries should harmonize their customs procedures, including more standardized and transparent documents and inspection procedures and product standards. Also, sanitary and safety laboratory inspections in one country should be accepted in the other.SECURITY RISK!, NO!. DONT ASK WHY!

• Obstacles to FDI flows, other than restrictions based on national security grounds, in both directions should be eased and obtaining government approval streamlined. Each country’s companies should be allowed to float shares in the securities markets of the other, and double taxation on corporate and individual incomes should be removed.SECURITY RISK!, NO!. DONT ASK WHY!..

 

[Indus Pakistan]

If indeed cooperation with India is the way forward then may I suggest do the "full monty" by grabbing the bull by it's horms:-

(1) Pakistan federation is de-established and staus quo ante 1947 prevails where each province has local powers within loose confederation with India. Enjoy the full fruits that many euphoric members allude to.

(2) Since we are all "love an hugs brother by another mother" populations are encouraged to move back. Hindus and Sikhs of erstwhile united Punjab are invited back including Hindu Sindhi diaspora like Advani sahib can come back to their native Karachi.

(3) Declaration made that 1947 was full on fiasco of the XX century.

With this done we can all let trade take off big time. The military budget is slashed by 80% and spent on education/health sectors. It would be win win for all.


What say yee all?

 

[Nilgiri]

If indeed cooperation with India is the way forward then may I suggest do the "full monty" by grabbing the bull by it's horms:-

(1) Pakistan federation is de-established and staus quo ante 1947 prevails where each province has local powers within loose confederation with India. Enjoy the full fruits that many euphoric members allude to.

(2) Since we are all "love an hugs brother by another mother" populations are encouraged to move back. Hindus and Sikhs of erstwhile united Punjab are invited back including Hindu Sindhi diaspora like Advani sahib can come back to their native Karachi.

(3) Declaration made that 1947 was full on fiasco of the XX century.

With this done we can all let trade take off big time. The military budget is slashed by 80% and spent on education/health sectors. It would be win win for all.


What say yee all?

Too much bad blood on both sides for this to happen this century. Check back in 2100 if you are still around

 

[Indus Pakistan]

Too much bad blood on both sides for this to happen this century. Check back in 2100 if you are still around

I managed to make it to 2015 and it would be nice to see 2025 let alone 2100. As regards bad blood. What bad blood? There is very little bad blood but lot of brainless sheeps. You want to talk bad blood. Think half million British dead at hands of Germans and another 7 million German dead at hands of British/Allies. That is lot of bad blood. Five years later in 1950 it was all peace and love in Europe.

All it requires is clarity of vision. I detest this sort of meandering lack of vision. Make a decision and go for it. No half way bull. I opened a thread on Pakistan's future. It is high time a clear decision was made. We have too many poor people who deserve a clear policy not some fudged mushy policy that is in place at the moment.

 

[Nilgiri]

I managed to make it to 2015 and it would be nice to see 2025 let alone 2100.

I'll raise a glass to your good health.

As regards bad blood. What bad blood? There is very little bad blood but lot of brainless sheeps. You want to talk bad blood. Think half million British dead at hands of Germans and another 7 million German dead at hands of British/Allies. That is lot of bad blood. Five years later in 1950 it was all peace and love in Europe.

Problem is desis are very emotional but subservient people. They are quick to scapegoat, believe whatever someone in a better position tells them and then let that dominate their thinking past any pragmatism or empathy.

There are large populations of people somewhat/ largely unaffected by this phenomenon (more out of neccessity than choice given their economic situation)...but I do not hold out much for them being much different in the short/mid term when they are able to improve their lives and have margins of time to think about larger questions regarding identity, nationhood and politics.

In Europe, they are able to fundamentally move on and accept war happened when it happened for various reasons....and divert that bad blood only to realm of sports etc. This is because the "peasant" + "working class" have moved on from the absolute squalor of say the victorian times and have improved to a large degree educationally+economically. Till that happens in South Asia (and its going to take a long time) and then put say a generation on top of that, is when I see it happening potentially (economically first, politically maybe very long term). Solving Kashmir issue peacefully will be a litmus test for that time frame.

 

[Kaniska]

Any further update to this thread is always welcome.

 

[Joe Shearer]

If indeed cooperation with India is the way forward then may I suggest do the "full monty" by grabbing the bull by it's horms:-

(1) Pakistan federation is de-established and staus quo ante 1947 prevails where each province has local powers within loose confederation with India. Enjoy the full fruits that many euphoric members allude to.

(2) Since we are all "love an hugs brother by another mother" populations are encouraged to move back. Hindus and Sikhs of erstwhile united Punjab are invited back including Hindu Sindhi diaspora like Advani sahib can come back to their native Karachi.

(3) Declaration made that 1947 was full on fiasco of the XX century.

With this done we can all let trade take off big time. The military budget is slashed by 80% and spent on education/health sectors. It would be win win for all.


What say yee all?

SHIT.

I'm reacting to the second last sentence.

We'd reach take-off velocity. That huge demographic dividend would stop being anaemic zombies with permanent brain damage, and become a proper dividend instead. My head is spinning thinking about the possibilities.

 

[Nilgiri]

Any further update to this thread is always welcome.

Nice thread resurrection lol. Man look at old me go! Then I see good members that have left and I feel a bit sad too.

 

[El Sidd]

Road to Peace leads through Kashmir.

Pakistan does not need to have any trade relations with a country who has sponsored terrorism on its soil.