MFN status can boost India-Pakistan trade to over $10 billion: FIEO
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The Federation of Indian Exporters Organisation (FIEO) says that bilateral trade between India and Pakistan has the potential to grow almost four times to over $10 billion if Pakistan grants the Most Favoured Nation (MFN) status to India. Under the World Trade Organisation (WTO) obligations, India had granted the MFN status to Pakistan in 1996, but Pakistan has not reciprocated so far. In 2012, the Pakistan government agreed to award the MFN status to India and it was anticipated that the Nawaz Sharif government will do so by the end of 2014. However, the recent turmoil in Kashmir has derailed negotiations between the two countries. FIEO hopes that talks between India and Pakistan will resume soon. M Rafeeque Ahmed, President, FIEO, says, “There is no denying the fact that the political atmosphere has to be conducive for trade. However, we are hopeful that trade talks would commence shortly so that India’s demand for MFN which was agreed in 2012 is operationalised quickly.” Despite high potential, Pakistan is India’s fourth largest trading partner within the South Asian Association for Regional Cooperation (SAARC). Currently, bilateral trade between India and Pakistan stands at around $2.7 billion, but it could surge to over $10 billion if the MFN status is awarded to India. The FIEO President says that the grant of MFN or the proposed Non Discriminatory Market Access (NDMA) would provide huge market opportunities for Indian exporters in auto, steel, paper, plastics, textiles, electrical machinery and pharmaceuticals.
This article was published on August 25, 2014.