Date:01/02/2005 URL: http://www.thehindubusinessline.com/2005/02/01/stories/2005020102280900.htm

Back Pak envoy hopeful of boost to trade ties with India

Our Bureau

Chennai , Jan. 31

THE Pakistan High Commissioner to India, Mr Aziz Ahmad Khan, is confident that the Agreement on the South Asian Free Trade Area (SAFTA) will come into force as scheduled from January 1, 2006.

In an interaction with journalists from The Hindu group here today, he said that technical level discussions on the agreement were on and the agreement was "very much on course."

(The agreement, signed on January 6, 2004 during the 12th SAARC summit in Islamabad, is to come into force from January 1, 2006. Currently, the sensitive lists of products, rules of origin, technical assistance as well as a mechanism for compensating revenue loss for least development member states are under negotiation.)

On trade between India and Pakistan, Mr Khan said there was tremendous scope for growth. Two-way trade, which was about $ 250 million last year, picked up and was heavily in India's favour. The reason for this was that India had a "very high protective regime," particularly non-tariff barriers, he said.

He said there were complaints that while India had granted Most-Favoured Nation (MFN) status to Pakistan, the latter had not reciprocated.

A process of dialogue on trade related matters had also been set in motion and a technical committee that was to meet in January would now meet in February, he said.

Mr Khan said Pakistan had removed subsidy on everything. Most of its industry was agriculture-based and subsidies had been removed on even power and fertiliser, because of which the cost of production was higher in Pakistan. "We want to examine all that and see what can be done." Pakistani delegations were participating in trade exhibitions being held at the Pragati Maidan in Delhi and there were some Pakistani participants at the leather exhibition in Chennai. "A Pakistani trader is no longer afraid of trading with India," he said.

On India-Pakistan talks, the High Commissioner said, "the process is moving, perhaps a little slowly." Under the circumstances, it was expected that the bilateral discussions would move slowly. However, the key was that both sides remain committed to the process.