A෴cording to a World Bank report, the trade potential between to neighbouring na🧸tions of India and Pakistan stands at USD 37 biliiion.
The report, however, said persistent tensions, which are mostly political, between the two countries, along with lack of normal trade act𓆉ivity among the two nations, have cast a shadow over cooperation effor𒁏ts within South Asia.
The report 'A Glass Half Full: The Promise of Regional Trade in South Asia', which was released on Monday, has highlighted among key factors, the long list of♍ product restrictions in bilateral trade. Indiaℱ and Pakistan continue to maintain long, sensitive lists of items on which no tariff concessions are granted.
The lack of normal bilateral trade relations between the two countries affects the formation or deepening of regional value-chains in various high-value trading sectors, Dawn newspaper reported quoting the report.
Pakistan has a list of 936 items and almo⛦st 17.9 per cent of tariff lines that apply to imports from all South Asian Free Trade Area (SAFTA) countries.
🦋India maintains a list of 25 items (0.5 per cent of tariff lines), which includes goods such as alcoh🌌ol, firearms, etc.
However, it has a much longer, 64-item list, (almost 11.7 per cent of tariff lines) for Pakistan and Sri Lanka, but which effectively applies only to Pakistan, because India applies a smaller sensitive list to Sri Lanka as ꦏpart of a separate India-Sri Lanka Free Trade Agreement.
Items on the Indian ౠsensitive list can be imported at the most-favoured-nation tariffs from any SAFTA country, including Pakistan, because India accorded Pakistan the status in 1996, soon after the accession of the two countries to the World Trade Organisation.
However, Pakistan has not granted India the most-favoured-nation's status or non-discriminatory market ac༺cess.
In addition, the preferential access granted by Pakistan on🙈 82.1 per cent of tariff lines under SAFTA is partially blocked in the case of India because Pakistan maintains a negative list comprising 1,209 items that cannot be imported from India.
In practice, many of these items are exported from India to Pakistan through a third country, usually the United𒆙 Arab Em🍷irates.
The report says another barrier to bilater🎃al trade is the proliferation of NTMs (non-tariff measures), some of which take the form of non-tariff barriers, such as port r𒈔estrictions.
Pakistan allows only 138 items to be imported from India over the Attari-Wagah land route. Furthermore, cargo trucks from either side cannot move beyond their border zones, which means that 𝔉goods must be transloaded at the border, adding to the time and cost of trading.
Another factor impeding bilateral trade in goods and services, as well as FDI, is the encumbered visa regime that India and Pakistan have created for each other, which restrict🌟s the mobility of people bet⛄ween the two countries.
Continued political tensions and lack of normal t🌺rade relations between India and Pakistan have cast a sh𒀰adow over cooperation efforts within South Asia, contributing to the lack of progress in the regional cooperation agenda of SAARC and SAFTA, the report said.
PTI
