Pakistan-India Trade:

Amin Hashwani
and with the ultimate objective of entering into a concessionary trade
regime—under the SAFTA agreement, and with all the countries of
the region. Since 2011, India has initiated efforts to engage with all its
neighbors, not only redressing their trade grievances but also making
substantial investment commitments through the large Indian corporate
sector. This change of attitude by both India and Pakistan is due to a
growing realization that the world is changing, and that they need to
adapt to these shifting ground realities.
The Mumbai terrorist attacks led to a severe emotive backlash
against Pakistan and especially the Pakistani establishment. However,
as India moved from a reactive to a reflective mode, the importance of
having a vibrant and stable region for long-term progress became clear.
In Pakistan, the fear of undermining its political position by making
disproportionate progress on trade with India has died down. This is
primarily because the rules and benchmarks of engagement between nations
have changed, as economic and political interests have now become
intertwined in foreign policies around the world. In the long run,
nations now recognize, progress on one front can actually help to resolve
issues on other fronts.
China, which is one of Pakistan’s closest allies and perhaps a role
model for economic development, has focused primarily on trade with
its neighbors despite unresolved political issues. China/Taiwan and
China/India are the two prime examples where trade and investments
have exponentially grown in the last decade, even while political stances
have remained intact. If anything, with this increase in economic activities,
a vested interest for peace has been created; public discourse has
changed; and rhetoric has given way to informed discussion and changing
perceptions.
reCoMMendaTions
Currently, there is optimism that reasonable progress on trade can be expected
by 2013 if both sides implement the road map to which they have
committed themselves. However, it is essential that other issues that were
part of the earlier Composite Dialogue—including Jammu and Kashmir,
Siachen, Sir Creek, Wullar Barrage, terrorism, and drug trafficking—be
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