Pakistani industries view trade with India with alarm

Monday, 31 October 2011 00:00 - - {{hitsCtrl.values.hits}}

ISLAMABAD: Efforts by longtime nuclear-armed foes Pakistan and India to liberalise their restrictive trade regimes have sent jitters across some Pakistani sectors which feel threatened by free trade with the neighbouring economic powerhouse.

Pakistan’s Commerce Ministry is in the process of increasing the number of goods India can export to its neighbour. But some industries like pharmaceuticals feel cheap Indian goods will ravage local producers.

“There will be a sudden downfall,” said Riaz Hussain, General Secretary of the Pakistan Pharmaceutical Manufacturers’ Association. He says the local industry is worth $1.64 billion and produces 90 per cent of the drugs for the domestic market.

“They will flood the market ... We feel that all finished products should be on the negative list,” he said referring to a list of banned Indian goods.

The textile industry, which accounts for nearly 60 per cent of Pakistan’s exports, is also worried.

“We are particularly concerned about synthetic fibre and synthetic made-ups that should be on the negative list,” said Mohsin Aziz, chairman of the All Pakistan Textile Manufacturers’ Association.

“We are with the government on this but we can’t open everything,” said Abdul Waheed Khan, Director General of the Karachi-based Pakistan Automotive Manufacturers’ Association.

“The system should not be put into a sudden shock.” But in addition to some domestic opposition in Pakistan, there are other concerns. While India granted Pakistan Most Favoured Nation status in 1996, Pakistan has yet to reciprocate.

Pakistan Foreign Minister Hina Rabbani Khar said recently a decision had been taken “in principle” to accord MFN status to India, but officials say that should go hand in hand with New Delhi removing non-trade barriers against Pakistan goods.