Karachi: Pakistan Business Council (PBC) – a private sector not-for-profit business policy advocacy forum – has said that Pakistan’s Non-Discriminatory Market Access (NDMA) to India will lead to a mutually beneficial trade relationship only if India agrees to ease its Non-Tariff Barriers (NTBs) gradually.
In its latest report on Pakistan-India trade, PBC, representing Pakistan’s 47 largest enterprises, including multinationals, said the country must build capacity to support its exports and protect the local industry from subsidized imports from India.
The report also said that details and time frame of India’s promised concessions to Pakistan must be determined and considered before granting NDMA.
India’s concessions to Pakistan must be consistent with its concessions to other South Asian Free Trade Area (SAFTA) countries, such as Bangladesh and Sri Lanka, to ensure Pakistan gains fair access to the Indian market post-NDMA.
SAFTA came into force in 2006, resulting in tariff concessions by India, Pakistan and other South Asian neighbors.
India granted Most Favoured Nation (MFN) status to Pakistan in 1996, which Pakistan has to reciprocate by being a signatory of the World Trade Organisation (WTO). The final step towards normalized trade relations between the two countries is considered NDMA status for India to be granted by Pakistan. However, the PBC study argues for caution in granting India NDMA given the challenges faced in Pakistan-India trade.
Pakistan’s exports to India grew from $158 million in 2004 to $392 million in 2014, but it could only claim 0.09% of total Indian imports from the world in 2014. On the other hand, India’s exports to Pakistan grew significantly over the period under consideration, from $454 million to $2.1 billion. Still, it too could only claim 0.63% of total Pakistani imports from the world in 2014.
The study finds significant potential for trade between Pakistan and India and analyzes high-potential export products at a 6-digit level.
Though there is no doubt of huge trade potential that currently lies dormant between the two countries, granting India NDMA without resolving the major issues like NTBs will result in a one-sided realization of this potential, squarely in India’s favor.
In addition to possessing a very high export capability to Pakistan, the report noted that India offers substantive support to its producers through subsidies and export support schemes and maintains intractable NTBs to discourage imports.
Pakistan also possesses considerable export potential to India, but it offers little support or protection to its producers and exporters and has relatively low NTBs.
 to India will only benefit both countries if India steadily lowers its Non-Tariff Barriers (NTBs).){kind=link}