India is hoping for an assurance from Pakistan Prime Minister Nawaz Sharif on extension of most favoured nation (MFN) status to the country — permitting all Indian goods access to its market — in his bilateral talks with Prime Minister Narendra Modi on Tuesday.
Economic and trade ties are likely to feature prominently in the talks between the two premiers, who are expected to give a renewed push to bilateral relations. This meeting is significant as the BJP holds strong views on the political and diplomatic handling of ties with Pakistan by the previous regime.
The Commerce Ministry has already submitted a detailed note to the Cabinet Secretariat on where the on-going trade talks are poised at the moment, a Ministry official told Business Line .
Ball in Pakistan’s court
“We have pointed out that Pakistan has to take the next step in the trade liberalisation process by extending non-discriminatory market access status to us.
“We are hopeful that the Pakistani Prime Minister will make a commitment or give an assurance of that happening soon,” the official said.
The Ministry is also hoping that Sharif will not link Most Favoured Nation status to India to resolution of the Kashmir issue, as Pakistan has done in the past.
“As the two Prime Ministers are also likely to discuss the Kashmir issue, we are hoping that the Pakistani PM does not link it to Kashmir as the country used to in the recent past,” the official said.
MFN status
MFN status, which is now referred to by the more politically acceptable term ‘Non-Discriminatory Market Access’, would lead to removal of the existing ban on 1,209 Indian products.
Pakistan has already increased the number of items allowed from India from just about 2,000 items to more than 6,800 in the last three years.
The Pakistani Cabinet, which seemed ready to extend NDMA status to India in April, postponed the decision at the last minute, preferring to wait for the new Government.
Trade potential
The Indo-Pak trade dialogue, which has the potential of increasing bilateral trade from the current $3 billion to an estimated $20 billion, was stalled in January last year following violence at the Line of Control in Kashmir.
The Commerce Ministry, which has been steering the trade dialogue, argues that India has done whatever it was required to do and it is Pakistan’s turn to deliver.
New Delhi is, however, ready to give Pakistan further concessions by reducing import duties to near-zero levels on all but 100 items (the same as for other trading partners in South Asia) as soon as it gets NDMA status.