The Hindu Business Line : India to take up Pak decision at SAARC Ministerial Council

Mr Jairam Ramesh said the decision of Pakistan not to extend the first TLP with India, when all other signatories have agreed to extend duty concessions on a reciprocal basis, goes against the spirit of SAFTA because SAFTA provides for only a negative list.

New Delhi , July 6

With Islamabad formally communicating to New Delhi on July 4 that it would not undertake the first trade liberalisation programme (TLP) with India under South Asian Free Trading Area (SAFTA), India has decided to take up the issue multilaterally at the SAARC Ministerial Council instead of bilaterally with Pakistan.

Disclosing this to Business Line here, the Minister of State for Commerce Mr Jairam Ramesh, said the Union Commerce and Industry Minister, Mr Kamal Nath, is taking up the issue with the SAARC Secretariat at Kathmandu for resolving this mater. He said the Commerce Minister has written a letter to the SAARC Secretary-General, Mr Chenkyab Dorji, asking him to convene the SAARC Ministerial Council.

He said the decision of Pakistan not to extend the first TLP with India, when all other signatories have agreed to extend duty concessions on a reciprocal basis, goes against the spirit of SAFTA because SAFTA provides for only a negative list.

Mr Ramesh said that Islamabad is "very silent on transport restrictions" and cited the case of how Indian tea can't go through Wagah route but has to go through Dubai.

He also recalled that the Foreign Minister of Pakistan and the Prime Minister of Pakistan said in September 2004 and February 2005, respectively, that the issue of MFN (most favoured nation) status for India would be resolved with the implementation of SAFTA and it would amount to MFA plus.

Hence, he said, this is in violation of what the Foreign Minister and the Prime Minster of Pakistan themselves had committed.

Mr Ramesh recalled his remarks at the first meeting of the SAFTA Ministerial Council held in Dhaka in April 20, 2006 when he expressed the hope that "beginning July 1, all of us will have only negative lists and movement restrictions, which go against the very essence of SAFTA, are also abolished".

He regretted that on both the counts, Islamabad has failed, thereby rendering SAFTA with "little operational meaning".

Mr Ramesh hastened to add, "we don't want to do anything in haste. We recognise that there are people in Pakistan who want to promote engagement with India and we will take measured action, as we are committed to economic and commercial engagement with Pakistan."

Ground reality

The Commerce Secretary, Mr S.N. Menon, told this correspondent that the ground reality is that Pakistan has not extended trade liberalisation programme under SAFTA to India. They have restricted the number of items of imports into Pakistan from India to 773 items in the positive list. "We want to study the issue with various agencies internally" before crafting the course of action with Islamabad, he added.

India's bilateral trade with Pakistan has been growing fast in the last couple of years with exports from India to Pakistan amounting to $521.05 million during 2004-05 and $681.85 million in 2005-06, a growth of 31 per cent. India's imports from Pakistan amounted to $94.97 million in 2004-05 and $177.48 million in 2005-06, showing a hefty 87 per cent growth last year.

Dr Nagesh Kumar, Director-General, Research and Information System for Developing Countries, said that India might take up the issue with the Dispute Settlement body of the SAARC Secretariat as denial of trade liberalisation by Islamabad to India goes against the spirit of SAFTA, where duty concessions are exchanged on a reciprocal basis and not in unilateral fashion.