Pakistan moves ahead for normalization trade with India

The federal cabinet on Wednesday not only approved a negative list of 1209 list of banned items but also sanctioned the phasing out of the negative list in the next ten months, aiming at complete trade normalization with India by the end of 2012.

Presently, Pakistan maintains a positive list of 1,945 items that are permitted to be traded between the two neighbors. The switch from a positive to a negative list has long been an obstacle to freeing up trade between Pakistan and India.

Federal Information Minister Firdous Ashiq Awan while briefing the media observed, “On recommendations of coalition partners and cabinet members, Prime Minister Syed Yousaf Raza Gilani has approved the negative list”.

The decision overruled reservations of the ministries of textile and industries which had been pushing for restricted trade with India to protect domestic manufacturers. The new decision will permit the import of about 90 per cent of all the items that India normally exports.

The positive list only permit 17 per cent Indian exports items before the new decision taken by the federal cabinet. From Jan 1 next year, India will be able to export all its products to Pakistan without limitations.

Firdous Ashiq Awan informed the media the cabinet had unanimously approved switching over from a positive to negative list trade regime with neighboring country. The move would pave way for complete liberalization of trade by the end of the year to culminate in an MFN (most favoured nation) status to India, she added.

The decision was taken in line with an assurance given by the Pakistani authorities to Indian Commerce Minister Anand Sharma during his recent visit. The cabinet had deferred the approval on Feb 14 with a directive to the commerce ministry to complete consultation with all stakeholders.

Awan further said normalization of trade with India was in the interest of Pakistan because it would help strengthen national economy and boost economic activities in the region.

She asserted full protection would be given to the local industry, saying the defence laws would be invoked in case of any loss to the national industry against a surge in imports from India.

She, however, clarified that there would be no compromise on any core issue including the Kashmir dispute and water issue.

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Posted by Faisal Farooq on Mar 1 2012. Filed under National, Pakistan, Politics. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.