ISLAMABAD - Two important members of the federal cabinet, Finance Minister Senator Ishaq Dar and State Minister for Commerce and Textile Khurram Dastagir Khan, are not on the same page regarding grant of most favoured nation (MFN) status to India.
Finance Minister Senator Ishaq Dar, in an interview to private news channel a few months back, said there was no immediate plan to give the MFN-status to India as he claimed there was a need to normalise relations between the two countries. However, his junior cabinet member, State Minister for Commerce and Textile Khurram Dastagir Khan, on Monday said the government was working to grant the MFN status to India and 82 percent of the preliminary work had been done.
The difference of opinions between the two ministers indicates the government has no clear-cut strategy to grant the MFN status to India. However, Pakistan had assured the International Monetary Fund (IMF) of granting the MFN status to India. “We are moving forward to eliminate the negative list on trade with India and extend India the most favoured nation status,” Pakistan said in a letter to the IMF.
The previous PPP government announced in October 2011 that it would grant the MFN status to India from January 1, 2013, by converting the negative list into positive one by the end of 2012, a step that would have automatically granted MFN status to India. However, Pakistan failed to grant the MFN status to India before December 31, 2012.
India granted the MFN status to Pakistan in 1996, but non-tariff barriers remained intact on exports from Pakistan and both the sides did not make much progress towards trade liberalisation. India, at present, can export all items to Pakistan other than the 1,209 items put on the negative list.
Later, When Pakistan Muslim League Nawaz (PML-N) came into power after the general elections of May 2013, it was supposed that it would grant the MFN status to India. However, Pakistan decided not to grant this status to India after tension emerged on its eastern border.
On the other hand, local manufacturers have expressed serious concerns over the grant of MFN status to India as they believe this move would force them to close down their businesses altogether and say trade with that country is not in their favour. Pakistan has faced over $6 billion deficit because of trade with India in six years, which suggests that trade with the neighbouring country is in its favour.
According to the figures, Pakistan’s exports to India recorded at $1.735 billion in last six years (from 2006-07 to 2011-12) against the imports of $8.363 billion, thus leaving the trade deficit at $6.628 billion in the period under review. The figures suggest that Pakistan’s exports never exceeded $350 million in a year while imports from India crossed $ 1 billion benchmark every year in the last six years.