ISLAMABAD - Pakistan would get immense benefit with trade liberalisation with India as Islamabad could save up to $900 million if it allows import from New Delhi on several items replacing its present imports from other countries at higher cost.

“Trade liberalisation will unambiguously benefit Pakistani consumers since product prices fall and consumer choices increases”, stated in a presentation given by Commerce Ministry to the National Assembly Standing Committee on Commerce on Thursday that was chaired by Engineer Khurram Dastagir Khan. Secretary Commerce Zafar Mahmood informed the committee about the estimated impact on Pakistan’s economy due to trade normalisation (liberalisation) with India.

The presentation stated that the trade volume between Pakistan and India could increase up to the level of $10 billion after the trade normalisation between the two countries. Secretary Commerce informed the Committee that India is exporting everything to Pakistan except 1,209 items included in negative list, which is likely to be phased out by December 2012, as decided by the federal cabinet. Indian Secretary Commerce would soon visit Pakistan where further negotiations regarding trade liberalisation would be held, he added.

He further informed that trade with India is in deficit for Pakistan as Indian exports stood at around $2 billion against Pakistan’s exports of only $300 million. Additional Customs revenue could be generated when import is legalised apart from saving in foreign exchange due to low cost of freight in a case of trade liberalisation with India, said Zafar Mahmood in his presentation.

He told the Committee that Pakistan has offered to switch from positive to negative list in April 2011. The Commerce Ministry sent request to all chambers, associations and business people to recommend products to be incorporated in the negative list he said and added that only 100 to 200 products list were recommended by the chambers in six months period. Later on the request of Commerce Ministry, the Institute of Business Administration (IBA) finalised a list of 636 items for negative list after detail study. However, after consultations of relevant ministries, the cabinet decided to expand the list to 1,209 items.

Secretary Commerce briefed the Committee regarding opening of bank branches agreed in a meeting between officials of Reserve Bank of India and State Bank of Pakistan on April 2012. An important meeting between officials of Interior Ministry Pakistan and Home Ministry India is likely to take place in next couple of weeks wherein issue of business visa would come under discussion. 

Talking about Pak-China Free Trade Agreement (FTA), Zafar Mahmood said that Pakistan’s exports have increased after signing the said agreement despite the fact that some local industries closed down.

Committee member Kashmala Tariq said that either Pakistan should import vehicles from India or to reduce different duties/ taxes imposed on the said sector in order to facilitate the common man. However, he informed that any decision in this regard could be taken by cabinet not by the Commerce Ministry.

The officials of Commerce Ministry also informed the preliminary budget 2012-13 of the ministry. The committee was informed that overall budget of the ministry is estimated at Rs 5.050 billion for the financial year to come that included Rs 5.05 billion non-development budget and Rs 500 million development budget.

The break-up of Rs 5.050 billion revealed that Ministry would spend Rs 1.141 billion on employees related expenses, Rs 1.281 billion on operating expenses, Rs 3.011 million on employees retirement benefits, Rs 2.588 billion on grant subsidies, Rs 2.338 million on transfers, Rs 6.274 million on physical assets and Rs 29.204 million on repair and maintenance of the ministry.