India and Pakistan: Clever steps at the border

Discussion in 'Subcontinent & Central Asia' started by ajtr, May 14, 2012.

  1. ajtr

    ajtr Veteran Member Veteran Member

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    India and Pakistan:Clever steps at the border
    With little fanfare, two old rivals are mending trade relations. They must do more
    May 12th 2012 | from the print edition


    A STUPENDOUS display of military nonsense erupts each sunset at the Wagah crossing between India and Pakistan. Thousands cheer rival guards in silly hats who strut with mock aggression, lower their flags and slam shut the border gates. The display is choreographed fun. But underlying it are deeper mutual antagonisms generated by a history of border wars, terrorism and the original sin in 1947 of partition itself. Nowhere are the costs of these antagonisms so apparent as in the pathetic levels of trade between these two populous nations.

    For years direct exchange was all but blocked. Apart from barter by Kashmiris and the odd trainload of cargo at Wagah, goods went via third-country ports, notably Dubai and Colombo. Once-thriving border towns, such as Amritsar, slid into relative gloom. Pakistan’s cocooned economy grew weak and uncompetitive. Even after Wagah’s road crossing reopened in 2005, when bilateral trade was little more than $600m, commerce has been stymied. Barmy visa rules keep away traders. Delays at dilapidated customs posts ruin perishable goods. Last year trade between India and Pakistan was just $2.6 billion. Unofficial trade boosts the figure, but it is still pathetic for countries with populations of 1.2 billion and 180m respectively, and combined economies of over $2 trillion. By way of comparison, India’s trade with China, another ancestral enemy, may soon pass $100 billion.

    The same economic pragmatism is beginning to appear between India and Pakistan. Both governments are daring to break with history. It is a difficult and brave thing to do, especially in Pakistan, where civilian politicians normally kowtow to the army. Yet they seem to have persuaded the soldiers that not all exchange with the arch-enemy is disastrous; and that more trade will mean greater prosperity, which will in the long run reduce the dependency on the American handouts that Pakistan’s armed forces loathe (see article).

    And so a thaw is taking place. Last year Pakistan said it would match India’s old offer of most-favoured-nation trading status. To little fanfare, Pakistan is now scrapping restrictions: adopting a “negative list” of specified banned goods, rather than, as previously, stipulating only what may be imported. Meanwhile, India is allowing more to arrive by road. Imports of Pakistani cement are now soaring. A smart new customs post at Wagah is speeding the flow of goods. Other crossings may open. Pakistanis may now invest directly in India’s economy. Indian petrol may next be sent westwards, with electricity to follow. This month home ministries of both countries will probably scrap the worst visa rules (see article).

    Dreaming of silk

    It all adds up to a profound and welcome shift. Businesspeople are excited, as delegations start making mutual visits. Yet the progress is vulnerable to many things, not least to another strike in India by Pakistan-based terrorists.

    While the going is good, both governments must be much more ambitious. Pakistan needs to focus on improving customs posts and quickly scrapping the remaining negative list on trade. But India, which stands to gain disproportionately from burgeoning trade, must make most of the running. Stable relations with Pakistan are a prize in itself for the Indians. Immense hurdles remain, not least the quest for peace in Afghanistan; but the longer-term dream is of land trade through Pakistan to Central Asia, with its oil and gas, and even to European markets. Given all that, India should dare to be generous, removing non-tariff barriers, cutting duties on Pakistani imports and making it easier to invest in India. Clever steps at the border today will bring great rewards in future.
     
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  3. Yusuf

    Yusuf GUARDIAN Administrator

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    All good. Problem is, Pakistan will make money out of India and channel into terror. It's a bloody double edged sword.
     
  4. Ray

    Ray The Chairman Defence Professionals Moderator

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    The Wagah tamasha is one of the most idiotic things that can be watched!

    They beat even the German goose-stepping!
     
  5. ajtr

    ajtr Veteran Member Veteran Member

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    Same as in case of chin-india trade where balance of trade is in china's favour and india helping china to run its war machinery against india.but as in case of Indo-pak trade balance of trade is always in favour of india.but then when india can trade with china then it can sure trade with pak too.unless india is fearful of both to stop trading with both based on ur inferences.
     
  6. Yusuf

    Yusuf GUARDIAN Administrator

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    For Pakistan, even a few cents count. For china a few billion does not matter. Plus china is a far more sane player than Pakistan.
     
    venkat likes this.
  7. Oracle

    Oracle New Member

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    I don't see any reason why India should help those effin Pakis generate revenue, while those country of terrorists continue to support terrorism. Perhaps Barack Obama ushered a new definition of Nobel Peace Prize, and MMS wants to go down in history with golden stokes.
     
  8. ajtr

    ajtr Veteran Member Veteran Member

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    India-Pakistan relations
    Make lolly, not war
    India gears up for a welcome expansion in trade with Pakistan


    A DROWSINESS hangs over the vast new customs post at Wagah, India’s main border crossing to Pakistan. A “Jattha shed”, a towering shelter for hundreds of pilgrims, stands empty. The vehicle park has space for 500 lorries, but today just two gaudy Pakistani ones are unloading sacks of chemicals.

    Built from pink and yellow stone, the 120-acre (50-hectare) site opened a month ago. Tall white letters spell out “trade gate” across a dust-blown arch that marks the exit to Pakistan. The calm, however, is about to end. The chief at Wagah says the warehouses, vehicle-inspection pits and staff with high-tech scanners are poised to handle as many as 1,000 lorries a day—several times more than before. He pledges to “work round the clock” to let bilateral trade between South Asia’s two largest economies bloom like never before.

    Pakistan is unpicking official barriers to trade, after last year offering most-favoured nation trading status to India (reciprocating India’s 1996 offer). Restrictions on traded goods, notably by road, are going, with potentially huge effects. Road transport is only one-third the cost of shipping goods to Pakistan by sea, via Dubai, as happens now.

    Until this year, says Nisha Taneja, a researcher at the Indian Council for Research on International Economic Relations, Pakistan let only 14 products enter by road. As that number rises there will be a “quantum leap” in trade relations. She sees “no doubt that trade will increase a hell of a lot” from its level of $2.6 billion a year.

    Changes at the border are already obvious. An exporter underlines the inadequacies (high fees, no container trade) but goes on to laud the new post. Shipments now get through Wagah in a few hours, he says, where before they languished in the heat, sometimes for more than a week. An Amritsar-based haulage boss, whose family has run lorries to and from the border for half a century, says he has doubled his fleet to 80, ready for the boom. He is buying land, too, as prices soar.

    He says over 4,000 lorries carrying tomatoes from Maharashtra crossed to Pakistan in the past three months alone, a huge increase. A similar quantity of soyabeans has gone to Pakistan’s poultry farms. A trader says that, in return, 100 lorries loaded with cement, plus others with gypsum rock and other minerals, will soon arrive daily in India, as Pakistani producers meet demand from Indian constructors. A new oil refinery in India’s Punjab may start sending petrol over the border, giving a boost to total bilateral trade.

    For Amritsar, a once-thriving city dominated by Sikhs, renewed trade could drive an economic revival. On May 24th the two countries are expected to ease a tight visa regime, allowing multiple-entry visas and access beyond each country’s three largest cities. Places near the border like Amritsar hope for an influx of tourists, traders, students and investors.

    On May 7th Pakistan’s prime minister, Yousaf Raza Gilani, told a visiting Indian business delegation in Lahore that he hopes for closer co-operation in IT, education and health. A Punjabi exporter, over a plate of buttered chicken, is more to the point. He dreams of profits made selling galvanised steel, as he did when Pakistan briefly allowed imports of it after the 2005 earthquake in Kashmir. Others tick off wishlists for exporting car tyres, machinery and pharmaceuticals.

    Yet limitations will persist. Rajdeep Uppal, an Amritsar-based merchant who has operated across the border for 15 years, helped lead a four-year campaign for the new Wagah post. He points out how infrastructure, such as Pakistan’s small border post, must be improved on the other side. He also wants banks from each country to operate in the other, so that trading need not be done in hard currency. And he wants India “as a much larger, elder brother” to take the lead in opening up, making Pakistanis feel safe, slashing duties on their goods and encouraging them to invest and trade in the bigger economy.
     
  9. ajtr

    ajtr Veteran Member Veteran Member

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    even few cent doesnt matter for pak when trade with india will bea losing proposition for it.it has ability to generate those few cents to send 10 kasabs into mumbai in just one eid collections of animals and eid zakat.so trade or no trade kasabs will keep coming and keep coming for that india has no answer.Basically its just attrition of war or collateral damage.( watever you wish to term it)
     
    Last edited: May 14, 2012
  10. marshal panda

    marshal panda Regular Member

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    Anything that crosses Radcliffe line towards east, is laced with terror or counterfeit currency.
     

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