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Pakistan to reap billions by awarding MFN status to India
 
 
 
Pakistan to reap billions by awarding MFN status to India

ISLAMABAD - Setting aside the reservations of the local industry and farmers, the PML-N government is all set to give non-discriminatory market access/most favoured nation status to India within next few days that would provide benefit of Rs 550 billion to Rs 600 billion to the country’s economy.
“India has given clear indication to accept Pakistan’s two main demands of accommodating exportable items and removing additional duties within six months, which has paved the way for Islamabad to grant NDMA status to New Delhi,” said a top official of the Commerce Ministry, talking to journalists, wishing not to be named. He further said the federal cabinet would decide to grant MFN status to India in the next few days. However, he did not give any specific date for the cabinet meeting.
On a question regarding taking military establishment on board on MFN status, he replied, “It is neither my responsibility nor my authority, as I have put the matter before the prime minister.”
He explained that Pakistan would not sign any new trade agreement, but would obey the agreements signed by the previous government of Pakistan People’s Party with India like granting MFN status. “The current deal between the two countries on MFN/NDMA is totally in Pakistan’s favour,” he said and added that Pakistan would have to wait till 2016 if the incumbent Indian government did not sign the deal.
Talking about the reservations of the local industry, the official said the government would definitely protect their interests. The government would protect four sectors, agriculture, textile, pharmaceutical and automobile, he added. He admitted the trade was currently in Indian favour as Pakistan’s exports were only $350 million against the imports of $1.8 billion.
The Indian government granted 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. Later, Pakistan 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. Now, the incumbent government has decided to grant the MFN status to India.
It is worth mentioning here that local industries like automobile and pharmaceutical as well as farmers have shown serious concerns over the government’s decision of granting the MFN status to India. Thousands of Pakistani farmers have decided to stage a sit-in at Wagah Border from March 31 onwards for an indefinite period against Islamabad’s decision to grant non-discriminatory market access (NDMA) to New Delhi.
Pakistan Kisan Ittehad President Khalid Mahmood Khokhar said in a press conference that India had already controlled waters flowing into Pakistan, now it wanted to control the agriculture of Pakistan. The farmers of the country would not accept this trade, he added.
However, the Commerce Ministry documents present a rosy picture of Pak-India trade. Pakistan’s GDP would increase by around two percent in next three years following normalisation of trade between the two traditional rivals, said the official papers of the Ministry of Commerce. “Pakistan’s exports will increase to Rs 250 billion from the exiting Rs 30 billion.
Textile share in total exports to India will be 60 percent and share of manufacturing and agricultural products 25 percent. Similarly, Pakistan’s exports to other countries will surge by Rs 200 billion as the country will import cheaper raw materials from India,” the papers said.
Similarly, according to the papers, Pakistan’s import bill will reduce by Rs 100 billion due to the cheap raw material imported from the neighbouring country. The government has also estimated that around 500,000 employment opportunities will be generated in the country after granting the MFN status to India.

 
 
on epaper page 12
 
 
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