The Hindu Business Line : MFN status takes centre-stage at Indo-Pak meet — Lahore chamber insists on removal of farm subsidies

Mr Mian Anjum Nisar, President, Lahore Chamber of Commerce and Industry (right), exchanging documents with Mr Subodh Bhargava, past President, Confederation of Indian Industry, after signing a memorandum of understanding during India-Pakistan Business and Economic Cooperation Meeting in the Capital on Monday. — Ramesh Sharma

New Delhi , March 1

THE recent improvement in the political climate between India and Pakistan notwithstanding, the issue of Pakistan granting the `Most Favoured Nation' (MFN) status to India continues to be a bone of contention between the business communities of the two countries.

While the domestic industry misses no opportunity to raise its demand for MFN status to India, a large section of the Pakistani business community has expressed reluctance in pushing its Government for granting the special status to India.

This difference in viewpoint emerged once again at a meeting organised by the Confederation of Indian Industry (CII) for a 70-member delegation of the Lahore Chamber of Commerce and Industry (LCCI) here on Monday.

On the domestic industry's demand that the LCCI should impress on the Pakistani Government to accord MFN status to India to facilitate larger direct trade between the two counties, the LCCI President, Mr Mian Anjum Nisar, said that unless subsidies are removed by the Indian Government in areas such as agriculture, it would not be possible for the chamber to push for MFN status for India.

"We want that things should move forward. There are areas like agriculture, which are still protected by the Indian Government through subsidies. Unless, these subsidies are removed, it will not be possible for our agriculture sector to survive in a post-MFN regime," Mr Nisar said.

CII officials, however, made it clear to Mr Nisar and his delegation that their apprehensions on the Indian Government doling out subsidies to agriculture were misplaced.

"Even on exports of agricultural products, the extent of subsidies which are granted by the Government are well de-minimus levels permitted by the World Trade Organisation (WTO). Most of these so-called subsidies relate to incentives on transportation," they said.

Referring to the concerns voiced by the LCCI President on subsidies, a senior industry official said that similar concerns were expressed by the domestic industry when India entered into free-trade agreements with countries like Thailand.

"In such agreements, we were also worried that our exports would be uncompetitive as the countries with which we were signing agreements were practising protectionist policies," an Indian business leader said.

On the demand from industry for visas to go to Pakistan, the High Commissioner, Mr Aziz Ahmad Khan, assured that multiple entry business visas would be granted to Indian business people.

Mr Ahmad added that the implementation of the gas pipeline project from Iran to India through Pakistan would benefit the Indian economy the most.

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