111 510 510 libonline@riphah.edu.pk Contact

Trade ties with India

To get a better idea of how Pakistan’s trade ties with India can develop, think of the difference between a long distance trek and a pole vault. Anybody who has trekked in difficult terrain knows how painstaking a task walking and stepping and charting a course can be. A simple 30-foot climb can become long and arduous, requiring the mind to be fully focused on every step while being mindful of the path ahead.

A pole vault is relatively simpler by comparison and can get you up to 30 feet in a matter of seconds.

It’s useful to recall the difference between these two modes of “getting there” when considering the state of play in our economic re-engagement with India.

A pole vault gets you up there within seconds, but can’t keep you there for long, and the landing can require a pretty large cushion if it’s not to do any injury. A trek, on the other hand, is slow and arduous, requires a constant exercise of the mind to pull off, but gets you there in a reliable and sustainable manner.

If a “normalised” trade relationship with India is a state of affairs we imagine at some point in the future, it’s best to start thinking of the journey there more as a trek than a pole vault. This was the basic conclusion that I arrived at after a two-day conference in Delhi on the subject hosted by one of India’s premier economic think tanks.

Our own journey to the conference was a little like a trek itself. Part of the Pakistani delegation to the event crossed into India on foot across the Wagah border. While sitting at the checkpost, enjoying the warm hospitality of the customs officials and filling out our immigration forms for entry into India, the news arrived that a militant attack had taken place in Srinagar.

Almost immediately questions began to be asked. What will this mean for our entry prospects? How will this impact the dialogue at the conference? What will this mean for the larger prospects of normalised trade ties?

As it turns out, neither our entry nor the state of the dialogue at the conference were impacted even in the slightest. We were all welcomed with broad smiles, and the discussions at the conference were not allowed to be obstructed by shrill shouting in the media.

Of course every terrorist attack, whether in India or in Pakistan, is a matter of utmost seriousness and needs to be condemned in the most unambiguous words. But it was refreshing to see that not a single participant at the conference was willing to allow the agenda to be held hostage by the killings.

Over the next two days, as I sat and listened to the debates following each paper presentation, it occurred to me that some themes keep reasserting themselves as the dialogue around the normalisation of trade ties between India and Pakistan moves forward.

The first theme is the two-sided nature of the discussions. There are the “data” people, and there are the “supply chain” people.
The former tend to be academics and the latter businessmen.

The “data” people concern themselves with questions like estimating what the potential size of trade volumes between India and Pakistan can be if trade relations were to be normalised.

This research gives us an idea of the scale of the proposition that is under consideration, and some of the papers presented during this conference were putting the figure at $20 billion. That is almost as large as all of Pakistan’s non-oil external trade, for reference. Think about that for a moment: the size of Pakistan’s trade with India can potentially grow to become as large as the size of our non-oil trade with every other country of the world combined!

The supply chain people specialise in “ground realities”, so to speak. For example, currently India and Pakistan operate one land border crossing, at Wagah, and infrastructure bottlenecks at this crossing limit the kind and volume of cargo that can cross.

For instance, the lack of handling facilities for containerised cargo means that it is still not possible to transport across the border many of the items on the positive list for the land crossing.

Issues of this sort are numerous and need to be worked through in meticulous detail. The growth of trade volumes needs to be assessed for its beneficial as well as its harmful impact, and each country needs to set its agenda for negotiation in light of this.

Additionally, there are those who bring an entrepreneurial energy to the dialogue, by imagining all the linkages that are possible given some relaxation in visa regimes.

Then there are those who bring a vested interest to the dialogue and they take various shapes: from those who are eager because their business stands to benefit to those who are apprehensive because their business stands to lose.

Finally, there are those who bring emotive appeals, whether to the unfairness of how the process is moving forward, or to linkages with non economic issues. Often these emotive appeals are couched in the language of indelible suspiciousness, born of animosities that view the world through a “them and us” prism. The latter crowd, however, is a diminishing breed.

The point to bear in mind through it all is this: the size of the proposition under discussion is enormous, a game changer. Growing trade volumes with India will work in a way unlike any other trade regime we currently have simply because of the long land border, shared history and linkages.

And number two: emotive appeals are unhelpful because the road to the final goal is a long, arduous and methodical one Steady, deliberate and measured steps will get us there in a far more reliable and sustainable way than any attempt to pole-vault ourselves into position.

The writer is a Karachi-based journalist covering business and economic policy.

khurram.husain@gmail.com Twitter: @khurramhusain

Khurram Husain, "Trade ties with India," Dawn. 2013-03-21.