India-Pak trade under cloud as ‘India Show’ gets off in Lahore

The second edition of the 'India Show' got off in Lahore, Pakistan amidst a blame game by India and Pakistan over the current stalemate in bilateral trade.

The India Show, from 14 to 16 February 2014, is jointly organised by the Federation of Indian Chambers of Commerce and Industry in partnership with the ministry of commerce and industry, with support from the Federation of Pakistan Chambers of Commerce and Industry, Lahore Chamber of Commerce and Industry and Trade Development Authority of India.

Speaking on the sidelines of the India Show, commerce minister of Pakistan Khurram Dastgir Khan blamed the foreign ministries of India and Pakistan for the current stalemate in bilateral trade.

The minister, however, said he expected the talks to resume soon so that trade flows are evened out and that Pakistan would be able to deliver on the promise of removing all barriers to trade with India.

Indian commerce minister Anand Sharma and other top Indian government officials, however, abstained from attending the trade show as Islamabad refused to satisfy three demands set out by New Delhi.

Pakistan's rejection of India's demands has been communicated in a telephonic conversation between the Pakistani and Indian commerce secretaries, following which the Indian side chose to opt out – leaving a cloud over the stuttering revival of trade between the South Asian neighbours.

New Delhi had sought a solution to sudden halt of overland trade through the Wagah-Attari border before his visit to Pakistan.

The Indian government wanted Pakistan to permit the free flow of all exportable items through the Attari-Wagah land route and announce the same during his visit.

India currently exports 137 items to Pakistan through the Attari-Wagah route. Over 7,000 items feature on Pakistan's positive trade list for import from India through other means. India is keen on increasing in overland delivery of the number of its products to Pakistan.

The Indian government had apparently also asked Pakistan to accord Most Favoured Nation (MFN) status or Non-Discriminatory Market Access (NDMA) to India on the eve of the India Show.

At present, India cannot export textiles, agricultural products and equipment, pharmaceuticals, plastic goods, cutlery, automobile components, gems and jewellery, stone, marble and ceramics to Pakistan because the items feature on Pakistan's negative list of 1,209 items.

 India wanted the list phased out, something to which Pakistan had already agreed but, after Dastagir's visit and a chorus by anti-trade lobbies in Pakistan, Islamabad seems to be rethinking the plan.

The Indian side has demanded a reduction in the number of items on the sensitive list of the South Asia Free Trade Agreement (Safta). As of now, Pakistan has 840 items on this list while India has 614. India has been seeking a paring down of this list to just 100 items on a reciprocal basis over the course of a year.

Since Islamabad refused to comply with any of the preconditions, New Delhi decided to downgrade the status of its delegation.