There are generally two views on trade with India. One view is more of industrialisation and indigenisation through long-term policies, necessary protections and monitoring in Pakistan itself before any trade talks with India. The Engineering Development Board, in addition to the Board of Investment, was set up for such purposes that have issued guidelines in order to fulfil such objectives. The Federation of Chambers of Commerce and Industry and all other chambers, except one that is the Karachi Chambers of Commerce and Industry, have supported this view.

The other view is free trade. It has been influenced by the developed countries’ that “there is one world, one economy and one social order and hence free the economy of the developing countries to the developed world’s competitiveness.” The World Bank and IMF rely on bilateral contracts between the countries. The World Trade Organisation (WTO) has multi-national contracts relevant to country to country. Following the IMF and WTO, the opening of trade between Pakistan  and India has been initiated. However, neither IMF nor WTO are relevant in this case. Pakistan has not entered into such a contract and if at all it does, it has a limited binding, keeping in view the balance of payment position and GDP. Presently, WTO is not applicable to some of the industries at least, such as engineering and the automobile sector, and is quite flexible in other cases also.

Our niche: Regardless of who says what, Pakistan may well be advised to find its own niche in the broad spectrum of the developing and developed world, which itself developed through a protectionist policy. They are now reinforcing this policy through expanded international alliances like European Common Market, ECC and Nafta as one social order. The developed world is quite different from the developing world. Therefore, the policy for the developing countries must be different from the developed world and from country to country, according to its political, economic and social setup.

Trade with India: On the issue of trade with India, however, one must be quite prudent so as not to allow it overbear Pakistan’s economy and particularly the engineering; more so, the auto engineering sector where India enjoys an edge over Pakistan. If trade with India is opened without necessary checks and balances, the economy on the whole will be hit hard and the engineering industry in particular as also the auto engineering sector.

A view rather liberal is held in that in line with the developed world’s demand that there should be no localisation policy, no deletion programme and no monitoring of the industrialisation process. Whatever one can produce may produce; otherwise import! This view was in contrast with the local one - that there should be a localisation policy, deletion programme and its monitoring of industrialisation process in conformity with the national interests. One must produce all that is in the national interest. Pakistan Automotive Manufacturers Association (Pama) particularly and Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam) reinforce this view as also the Engineering Development Board.

Socio-economic well being: Pakistan came into being because the socio-economic well being of the minority Muslims in India was not being protected in the majority Hindu population. Indian Muslims wanted a separate homeland basically for that purpose. Even the Cripps offer proposing Muslim rule in the Muslims majority provinces in India was accepted by the Muslim League, but rejected by the Congress. After independence, Pakistan found itself without food, clothing, shelter etc. India was committed to provide food, clothing and all other necessities of life till Pakistan was capable to provide for itself. But it was fulfilled for a short while only and withdrawn obviously with a view to sabotage Pakistan’s very existence. Otherwise, why did India suddenly discontinue these facilities against an international commitment? And, why does it now want to initiate trade with Pakistan without settling the ever existing bone of contention - the Kashmir dispute? These questions must be asked before resuming trade with India.

The Indian economy: Nehru decreed that what is produced locally will not be imported. That decree is being followed in letter and in spirit through various barriers, including non-tariff, so that India can export freely, but not import. This measure is universal and not Pakistan bound. Nor India would be tempted to invest in Pakistan because of socio-political conditions and lack of socio-physical infrastructure. Will Pakistan invest in India in such conditions?

The Indian economy, however, is neither supplementary, nor complementary to Pakistan. It is highly competitive. It is about 10 times bigger than that of Pakistan. India is among the top 10 economies of the world and ranks among industrial nations.

Manufacturing contributes high GDP. The industrial sector contributes 60 percent of exports with engineering - auto sector - dominating. The infrastructural costs are much too heavily subsidised and subsidies are direct income exempt based. It has a much bigger market; the volumes are huge and hence lower overheads. The wage structure is low as also other direct and indirect costs. The industry is thus highly subsidised.

Relativity: The question thus is what are Pakistanis going to export to and import from India? How shall trade be balanced and industry protected from the vagaries of competition, dumping or smuggling that is already rampant? Is Pakistan going to import “daal-mirch masala” and “paan-chalia” or wheat, sugar or cotton because they are cheaper there? What about Pakistan’s own agriculture, the farmlands, farmers and farm labour then? Is Pakistan going to import household appliances, electronic goods, cycles, motorcycles, cars, automotive parts and at what cost of the economy? And, if so, then what about Pakistan’s own investment in these industries in embryonic stage, further industrialisation and industrial workers?

Economic sovereignty prevails over political sovereignty. This has been proved time and again. A case in sight is that of the USSR. The ‘might’ collapsed like a house of cards. It is no more a contender for world power status, although it still possesses all those nuclear weaponry. The USSR always imported food from the USA and Europe. Dependence for food and other necessities of life proved to be the last straw that broke the camel’s back: it became economically weak and ultimately lost its contest for  world power despite possessing all its weapons. May a lesson not be learnt from it?

There are these and many other soul-searching questions, which must be answered earnestly before embarking on free trade, free competition, free economy and trade with India.