Pakistan-India Trade:

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Product Code Additional Trade Challenges: Transport, Transit, and Non-Tariff Barriers Product description Pakistan’s exports to the World | 81 | india’s imports from the World Pakistan’s exports to india Pakistan’s Trade Potential 271019 Petroleum oils and oils obtained from bituminous minerals, other than crude Instruments and appliances 1194.8 2949.1 2.9 1191.8 901890 used in medical, surgical, dental, or veterinary sciences 219 334.1 0.3 218.7 711319 Articles of jewelry and parts 576.9 178.1 0.2 177.9 520100 Cotton, not carded/combed Tubes, pipes, 216.7 84.1 0.1 84 730690 and hollow profiles 69.2 76.5 0.1 69.1 220720 Ethyl alcohol & other spirits 86.7 66.6 0.1 66.6 850239 Electric generating sets 66.3 56.8 0.1 56.7 080410 Dates, fresh/ dried Structures and 52.4 95 0.1 52.3 730890 parts of towers, tubes, etc. 46.2 149.3 0.1 46.1 252329 Portland cement 373.8 42.5 0 42.4 Source: UNCOMTRADE database, http://comtrade.un.org/.
Nisha Taneja It is important to acknowledge that such estimates have their limitations. First, all computations are based on only one year’s data (2010). While using data for one year allows us to focus on the most recent data, this approach excludes the items that were traded in previous years. Second, these estimates do not take into account differences in the prices of commodities being supplied by the partner country and by suppliers from the rest of the world. The eVoluTion of india-PaKisTan Trade: froM PosiTiVe lisTs To Mfn In the period following the partition of India and Pakistan until the formation of the World Trade Organization (WTO), the two countries traded in a limited number of items. In 1996, India accorded MFN status to Pakistan. However, Pakistan continued to follow the positive list approach for imports from India. Even with the commencement of the South Asian Free Trade Area (SAFTA) in 2006, Pakistan did not grant MFN status to India. The positive list approach was a clear violation of SAFTA, as it implied discriminatory treatment vis-à-vis other member countries. Trading under the positive list approach led to massive informal trade flows, mostly in items excluded from the positive list. In 2004– 05, informal trade was estimated to be as large as formal trade (Taneja 2005), indicating the vast potential that exists between the two countries. Almost 88 percent of informal trade is routed through third countries (mostly Dubai). Here, goods enter into the Pakistani market after passing through Iran and Afghanistan, or directly to Karachi by sea. Even though an expansion of the positive list from 875 items in 2000 to 1,934 items in 2009 led to increased trade, the expansion was concentrated in three sectors: chemicals, base metals, and machinery and electronics—accounting for 59 percent of the total number of items on the positive list in 2009. Also, the expansion was not based on any economic criteria. In several sectors there was no expansion in the positive list, as protectionist lobbies with vested interests did not allow additional market access to Indian products. These included sectors like footwear and other accessories, ceramic and glass products, and gems and jewelry (Table 3). | 82 |
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