Doables to boost trade with Pakistan
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An internal study conducted by FIEO identifies the impediments in Indo-Pak trade relations and suggests measures to remove them. The Federation strongly believes that improved trade relations would provide the necessary cushion to the ongoing peace process between the two countries. Among the list of doables, the study places strong emphasis on calling reciprocity from Pakistan in terms of granting Most Favoured Nation (MFN) Status to India and says this would provide the largest impetus to the bilateral trade relations between them. |
As the next important measure, the study suggests both the countries to adopt relaxed visa regime. Currently, both India and Pakistan are providing visas to each other’s nationals for a maximum period of six months and with a maximum of three entries. The study suggests, "Both New Delhi and Islamabad should consider issuing multi-entry visas to exporters with at least two year validity. Such visas could be restricted to registered exporters and a premium fee could be charged for the same." For exporters, the study further recommends discontinuation of city specific visas and seeks that business visa holders should not be asked to report police authorities after entering the neighbouring country.
The study finds that Indian High Commission in Pakistan has introduced a Drop Box Visa Application Facility for business visitors from Pakistan and has been clearing business visas on priority. It requests Pak authorities to reciprocate similar gestures.
The study further finds that in the absence of sufficient land routes, the logistic cost of bilateral trading is very high. It recommends opening up new trade points across the Line of Control and setting up of custom bonded areas along the LoC.
The study also recommends the two sides to trade in local currencies by mutually fixing the exchange rate. Currently all trade transactions between India and Pakistan take place in international currencies and are routed through American or European banks. On an average, these banks charge a fee of US$ 220 for every transaction. If Indian banks are allowed to open branches in Pakistan and vice versa, these charges can be substantially reduced, the study suggests.
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The study points out that the State Bank of Pakistan does not give permission for payment of technology fees to India, as a result of which, Pakistani companies are currently paying astronomical prices for importing some technologies from Western countries that are available in India at low cost. In terms of organizing tradeshows, the study finds that while Indian establishment is willingly facilitating any such shows oragnised by Pakistan in India, the Pak establishment is not displaying similar enthusiasm. |
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Wagah Border |
The study identifies specific Indian products which are being sourced into Pakistan via Dubai at unreasonably high landing costs due to import restrictions. The products identified are: textiles and clothing; bicycles and parts thereof; writing inks, especially ball pen inks and gel inks; spare parts of industrial sewing machines; graphic art equipment and machines; steel plant equipments; printing inks for t-shirts; modified starches; solar dual power system etc. The study argues for lifting import restrictions on these products by Islamabad in the interest of Pakistani consumers.
Importables from India that Pakistan needs to include
Textiles and Apparels
While the import of all textiles and clothing from Pakistan into India is free from barriers, India’s export of these products to Pakistan is confined to an India-specific list. In respect of textiles and apparels falling under Chapters 50-63, Pakistan allows import of items covered only under 31 HS lines. In respect of Man-Made-Fibre (MMF) textile items, only three products - viscose fibre, viscose yarn and uncut weft pile fabrics of MMF - are allowed for imports into Pakistan.
Bicycles and Parts
Pakistan bans import of bicycles and bicycle parts from India. Opening import of such items from India will make bicycles available in Pakistan at competitive rates. It will also boost export of these items from Pakistan to third countries.
Writing Inks
Pakistan is not allowing import of Indian writing inks. Indian made inks, especially ball pen inks and gel inks, are imported into Pakistan via Dubai. Pakistan is importing inks from US and Europe that are very expensive compared to the Indian inks of the same quality.
Spare Parts of Industrial Sewing Machines
Pakistan allows import of industrial sewing machines from India, but not the parts thereof. Some of the sewing machines imported into Pakistan from India via third country have specific components which are not readily available in other countries causing problems for dealers and assemblers in Pakistan.
Graphic Art Equipment and Machines
Graphic art equipment and machines used in printing and packaging (such as newspaper printing plants, sheet fed offset plants, gravure plants, flexography plants and screen printing for pre-press, in-press, post-press and finishing operations) are not allowed from India into Pakistan. Pakistani printers have been using many Indian made machines bought from agents of Indian manufacturers in West Asian countries. Pak importers of these Indian machines do not get adequate after-sales-service which could be available for them in case of direct import from India.
Steel Plant equipments, various steel castings for Railways, power, cement, etc
Pakistan currently imports these items from Ukraine and China. It can save money if it imports these items from India.
Printing Inks for T-shirts
Both Acrylic Co-Polymers (HSN code: 3906.90.90) & Pigments (HSNCode: 3204.19.00) are allowed for imports into Pakistan from India, but their mixture (viz. inks) is not allowed.
Modified Starches & PET
Finishing agents for textiles (HSN Code: 3809.91.00) are importable from India but not as products viz. modified starch (HSN Code: 3503.00.00) or PET (HSN Code: 3907.60.00). As there are subtle differences in these products, Pakistani importers often face nomenclature disputes with customs. These products are not manufactured in Pakistan so their import from India would not affect local industries there.
These products are currently being imported into Pakistan from Southeast Asia, Europe & USA with a lead time of minimum 6 to 12 weeks. Pakistan may procure these items from India in maximum 2 to 3 weeks and at substantially lesser cost. This may also help Pakistani apparel & home furnishing manufacturers to execute their export orders in time and at lower cost.
Solar Dual Power System
The Solar (PV) Modules convert the Sun energy into electricity and charges the battery which is further processed into AC current and supplies power to domestic and other appliances, wherever the power is required. Wide range of capacities ranging from 350VA to 10,000 VA is being manufactured in India. India receives many enquiries for Solar Dual Power System from Pakistani businessmen. Pakistan currently imports this from China. Indian can supply this item at better price and quality than that by China.
Importables by Pakistan from Punjab
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Item |
H.S. Code |
Item |
H.S. Code |
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Hosiery woolen |
51.09 to 51.13 |
Garments |
61.02 to 61.17, 62.01 to 62.12 |
| Shawls | 62.14 | Sports Goods | 95.06 to 95.08 |
| Handtools | 82.01 to 82.15 | Footwear | 64.01 to 64.06 |
| Leather Garments/goods | 42.02 to 42.06 | Electrical Items (Domestic /Auto) | 85.09 to 85.15 |
| Wheat and flour | 11.01 to 11.08 | Bicycle and parts | 87.12 |
| Agricultural Machinery | 84.32 to 84.33 | Food processing Machinery | 84.34 to 84.38 |
| Communication equipments | 87.17 to 87.18 |
Importables via Wagah and Attari
At present only tomato, garlic, potato, onion, ginger, mutton, livestock and boneless-meat are being exported to Pakistan through Wagah Border and automobile tyres & tubes, printed books, soyabean meat extract, vegetable seeds, crude drugs and synthetic organic dyes by Rail through Attari. Following items also need to be included for trade via Wagah and Attari.
| Item | H.S. Code | Item | H.S. Code |
| Steel products | 73.01 to 73.26 | Sewing machines | 84.52 |
| Machine tools | 84.56 to 84.68 | Fruits | 84.38 |
| Cotton | 52.01 to 52.12 | Weighing Machines | 84.23 |
| Spices | 09.10 | Tyres and tubes | 40.11 |
