The Hindu : National : Pakistan should give India MFN status, says Shashank

Online edition of India's National Newspaper
Wednesday, Apr 07, 2004

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National

Pakistan should give India MFN status, says Shashank

By Amit Baruah

NEW DELHI, APRIL 6. Pakistan should give India the Most-Favoured Nation (MFN) status to facilitate more trade between the two countries, the Foreign Secretary, Shashank, said today. India, he pointed out, has already given Pakistan the status.

Speaking on India-U.S. economic cooperation at a meeting organised by the Indo-American Chamber of Commerce, Mr. Shashank said India and Pakistan had also been discussing the issue of increasing energy cooperation. Downplaying the controversy over outsourcing, Mr. Shashank said that partnership between the two countries was more important. Pointing to the immediate preoccupation in the United States with elections, Mr. Shashank said while the number of jobs being created in the U.S. had gone up, this was a cold comfort to those who had lost their jobs.

Indian companies had begun investing in the U.S., with the outflows touching $1 billion. "Today, India is associated with skills, quality, creativity and efficiency in the U.S. This is increasingly enabling the Indian businesses to move up the value chain in their exports to that country."

India had maintained the double-digit growth in merchandise exports to the U.S. — 12.5 per cent over the last five years. In 2002, India's exports to the U.S. grew at 21.4 per cent and came close behind the 22.4 per cent growth in China's exports to the U.S.

"In 2003, however, the growth was a more modest 11 per cent. Although strengthening of the rupee against the dollar would naturally raise concerns among Indian exporters, I believe they will overcome the challenge through innovation, quality, efficiency and appropriate marketing strategies."

After several years of sluggishness, the U.S. exports to India grew at 9.1 per cent in 2002, against a decline of 4.9 per cent in the U.S. exports worldwide, and this saw a sharp increase of nearly 22 per cent in 2003.

The Foreign Secretary suggested that India and the U.S. should cooperate in projects in third countries, and pointed to the scope the two nations helping in the battle against AIDS in Africa.

While referring to the neighbouring countries, Mr. Shashank said India was not interested in its prosperity alone. It wanted growth in the neighbourhood too.

He referred to the free trade agreement with Sri Lanka, which led to a massive increase in trade with India.

"From the perspective of the U.S. firms, new markets are constantly opening up in India. After the banking, insurance and securities markets, there would be new opportunities in the potentially large pensions market," he said.

Although Indo-U.S. economic relations were largely shaped by industry in both countries, the two Governments recognised that strengthening these ties were important for the shared objective of transforming bilateral relations and building a strategic partnership.

"During the recent visit of the [U.S.] Secretary of State, Colin Powell, to Delhi, economic relations constituted a major theme of discussions. In November 2001, the Prime Minister and the U.S. President agreed on a new bilateral economic dialogue architecture, comprising five components - dialogues on finance and investment; trade policy; commerce; energy; and environment," he said.

"We do believe that the moment has arrived for strong growth in our economic ties with the United States," Mr. Shashank added.

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