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MFN to help India export power

Pakistan’s decision to grant India the status of “most favoured nation (MFN)” is likely to boost bilateral trade, and pave the way for trade in electricity, petroleum products and Bt Cotton seeds, and reduce non-tariff barriers that are stumbling blocks in trade between the neighbours.

business Updated: Nov 03, 2011 22:13 IST
HT Correspondent

Pakistan’s decision to grant India the status of “most favoured nation (MFN)” is likely to boost bilateral trade, and pave the way for trade in electricity, petroleum products and Bt Cotton seeds, and reduce non-tariff barriers that are stumbling blocks in trade between the neighbours.

Both countries will explore the possibility of a “preferential trade agreement” to promote bilateral trade by bringing down import tariffs.

A group of experts will examine the possibilities of trade in electricity, including setting up of transmission lines,
funding mechanisms and other related issues.

Another group will suggest ways and means of expanding bilateral trade in petroleum products, a government official said.

This will also include trade arrangements for petroleum products, such as building of cross-border pipelines and use of road and rail routes, including the Munnabao-Khokrapar route.

Bilateral trade in Bt Cotton seeds is also under active consideration. “This would help Pakistan’s farmers and its textile industry by significantly raising cotton yields and ensuring better cotton security,” an official said.

“It was agreed to take this process forward by enabling business-to-business contact and governmental regulatory clearances,” the official said.

Pakistan is also expected to make an announcement replacing its “positive list” of tradeable items. Pakistan imports only the around 2,000 items on its, contrary to normal bilateral norms where every country has a “negative list” through which it protects certain sectors.