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India may open gates for more Pak goods

The Indian government plans to prune the list of sensitive items to expand trade with pakistan, reports Gaurav Choudhury.

business Updated: Dec 25, 2007 20:08 IST
Gaurav Choudhury

India is contemplating pruning the sensitive list to expand trade with Pakistan. Government officials said that two most important items which Pakistan has an export interest are textiles and agricultural products. An Indian Council for Research in International Economic Relations (ICRIER) study observed that Pakistani exporters feel that India rigorously applies import restrictions in these two categories.

India has 884 items under the sensitive list, while Pakistan has 1,183 items. Officials said that Pakistani trade negotiators have argued that India has a larger proportion of items in the list compared to Pakistan in key sectors such as textiles and agricultural products, a fact brought out by the ICRIER study.

India has 20 per cent of the items in the sensitive list in the agriculture sector and 34 per cent in textile products. The corresponding figures for Pakistan in the two sectors are 4 per cent and 24 per cent respectively, the study said.

Pakistani industry and policy makers have been voicing concerns about India’s protected market and feel that India imposes non-tariff barriers that restrict market access of Pakistani goods into India. As a result, the trade balance continues to be in India’s favour even though Pakistan follows a positive list approach.

In August, both countries took a host of measures to improve trade relations and set a $10-billion bilateral trade target by 2010.

India has given Pakistan a list of 484 tariff lines for inclusion in Pakistan’s positive list of items importable from India, and has asked Pakistan to submit a list of the 20 items that might be facing non-tariff barriers.

Indian trade officials, however, maintained that a positive list policy is in gross violation of the South Asian Free Trade Agreement (SAFTA). The expansion of the positive list is done in consultation with industry bodies, though no clear criterion is applied to determine these items.

“There continue to be products that are of trade interest but have not been included in the positive list so far. This was indicated by the fact that in the recent expansion of the positive list by 302 items, only 2 appeared in the top 50 items that were of export interest to India and of import interest to Pakistan,” an official said.