Security Issues And Trade Relations Between Pakistan And...
Transcript of Security Issues And Trade Relations Between Pakistan And...
Security Issues And Trade Relations Between
Pakistan And India
Under The Supervision of
Dr. Iram Khalid
Submitted by
Anam Khalid
M Phil International Relations
Department of Political Science, University of the Punjab, Lahore
Abstract
Pakistan and India has been complex relations due to historical and political
events since independence 1947. They fought three wars, have issues on boarder,
water dispute, conflict over Siachen, and Sir Creek a planned by India to attack on
Kahuta respectively. But the bone of contention between these loving angry couple
is Kashmir issue. Founding father of Pakistan believed trade is the way to peace
and harmony between two separated countries of sub-continent. major imprt and
export between two countries which can improve their relations in trade. when the
political relation of both country go on a smooth track the other relations in term of
social ,moral, and specifically economic ties would automatically remain develop,
and when there would be any break through and issues raise again, than the other
kind of relation must went down. Political momentum definitely will play a
significant role for Pakistan‟s trade position.
Key words: Security threats, Trade, MFN, Media, Government.
Security issues and trade relation between Pakistan and India
Pakistan and India has been complex relations due to historical and political
events since independence 1947. They fought three wars, has issues on boarder,
water dispute, conflict over Siachin, and Sir Creek, a planned by India to attack on
Kahuta respectively. But the bone of contention between these loving angry couple
is Kashmir issue.
Pakistan shares its longest boarder with India and has longest security threats as
well. India has large economically; military power and always enjoy rival hostility
with Pakistan and that situation threatened position of Pakistan. But what say that
“the secret of happiness is this: let your interest be as wide as possible, and let your
reaction to the things and persons that interest you be as far as possible friendly
rather than hostile”.
Number of talks, agreements, and dialogue conducted to normalize the relations
but the result did not resolve the issues between them. But now we can see the
policy of „‟peaceful co-existence‟‟ in term of trade. Both countries are trying to
normalize ties because both states need a peaceful environment for economic
development. And this is main base of my research to find out area of engagement
between friends less more enemy neighbors in trade relations.
Research Question:
1: what are the crisis between Pakistan and India?
2: Define trade relations between India and Pakistan?
3: is there are any risk on bilateral trade relations between them?
Basic Objective
To find out the main issues between both state and give historical
perspective of trade relation with current volume of import and export and also
look a side of hindrance on trade opportunity.
Litterateur Review
Pakistan‟s Foreign Policy 1947-2009 by Abdul Sattar is really concise
history on foreign policy of Pakistan with major powers and neighboring states as
well specifically with India. Its founder father repeatedly focused on friendly and
cooperative relations with its neighbors. But soon Pakistan faced a question mark
to its right to peaceful coexistence. Failure of United Nation to resolved the issues,
Pakistan begun look outward world for new friendly and allies relation in order to
provide safeguard to its independence. In this book the author emphasized on the
relations of India and Pakistan in nine chapters he also focused on war and disaster
of 1965.1971, struggle of Kashmir and give a brief chapter on Pakistan-India
disputes and crises.
DIMENSIONS OF PAKISTAN-INDIA RELATIONS by Ijaz Hussain :
This book is a collection of author‟s articles which published in Dawn, The News
and Daily Times on relations of India and Pakistan . it shows deep love of author
towards Kashmir as he mainly focused on issue of Kashmir. In this book he point
out what happened at the Geneva-based UN Commission on Human Right that the
case of Kashmir come as a „‟rude shock‟‟ for nation. Why our foreign policy and
prime minister did give hope to the nation without realizing that they may have to
retreat that would be not much positive? It shows that diplomacy under pressure
bound to b failed. Further author suggest that violation of human rights in Kashmir
is enough to tell international community the limits of Pakistan and Indian bilateral
relations. There is also a chapter on Water Issues and scene of Hijacking of Indian
Airliner in 1984.
Research papers
INDO-PAK TRADE AND ECONOMICS RELATION by Anand
P.Mavalankar is described trade and economic tie with historical perspective. And
gave a brief profile of Pakistan and India trade relation. From scenario of
Pakistan‟s trade the rate of growth is declined and the state of economy of Pakistan
suggest Pakistan to open normal trade to India to earn a sizeable amount by way of
exports and India would gain more in Household goods and engineering and
Pakistan get advantages in cotton, electric power and textile production on the
other hand. Besides opportunity of trade the bilateral relations of trade are also
facing problems too. The writer recommend that political and diplomacy relations
need to be a way of progressive and positive attitude to enjoy a trade link.
Areas of Engagement and Security Threats between India and Pakistan by Mubeen
Adnan also described the security threat to Pakistan by India. Pakistan feel
threatened from India as India is a large, economically stable and militarily strong
neighbor of Pakistan. History shows that relation between India and Pakistan since
their independence remained tense and sometimes remained worst. And the easy
focused on that step which was taken but both countries to normalize their relations
and minimize the issues. Peace is necessary for development and prosperity for
both. She suggest that „‟Expansion of population contacts, trade shows, economic
conferences, parliamentarian dialogues, release of prisoners, most favored nation
status and relaxation in visa policies are good engagements towards normalization
and betterment of relations. These engagements would help both India and
Pakistan to resolve their long standing issues and it will take time‟‟.
Pakistan‟s Trade with India: Thinking Strategically IJAZ NABI : GATT
(Generalized Agreement on Tariffs and Trade, the precursor of WTO), of which
both Pakistan and India were founding members, inserted an India-Pakistan
specific clause in the 38 Articles governing international trade (Article XXIV,
clause 11) „‟taking into account the exceptional circumstances arising out of the
establishment of India and Pakistan as independent states and recognizing the fact
that they have long constituted an economic unit, the contracting parties agree that
the provisions of this Agreement shall not prevent the two countries from entering
into special arrangements with respect to the trade between them, pending the
establishment of their mutual trade relations on a definitive basis‟‟ this shows that
the clause allows Pakistan and India to continue to enjoy a close bilateral trading
relationship. But due to long historical ties on crisis, there would be many other
factors that can be become a break up of smooth trade link its is suggests that
leadership of both countries to take strategically and regionally steps for ongoing
smooth and steady trade relations.
Historical background
The two South Asian nations Pakistan and India have fought three wars
since they got independence in 1947, and remain deeply distrustful of each other.
KASHMIR is the heart of hostility between the neighbors and was the cause of
two of their three wars since independence from Britain in 1947. The third was
over the founding of Bangladesh. And still it is a bone of contention between
Pakistan and India.
WATER The two countries have disturbed relation over use of the water flowing
down rivers that rise in Indian Kashmir and run into the Indus river basin in
Pakistan. The two sides have been trying to find a solution that would allow them
to withdraw troops, but India says it is unwilling to bring its forces down until
Pakistan officially authenticates the positions they hold.
Pakistan has said it is willing to do so but on the condition that it is not a final
endorsement of India's claim over the glacier, one source of meltwater for
Pakistan's rivers.
Pakistan says India is unfairly diverting water with the upstream construction of
barrages and dams. India denies the charge.No immediate progress is expected
here.
Tension raised when India decided to build dam on the Chenab River at Salal in
1970. Another tense situation seen in 1980s when India embarked on the
construction of a barrage on the Jehlum River at Wuller Lake. Another issue arose
when India Decided to build a hydroelectric power project on the Chenab River
with the Dam at Baglihar upstream from the Salal dam. SIACHEN Indian and
Pakistani forces have faced off in mountains above the Siachen glacier in the
Karakoram range, the world's highest battlefield, since 1984.
Sir Creek the demarcation of the line in Sir Creek at the west of Indo- Pak
boundary in the Run of Kutch. India claim that the territory of Sir Creek is the part
of India.
Kashmir Issue
Bbc published a very beautiful report on Kashmir issue with its important key
events since 1947 to 2016. It is very informative report that tell us the struggle of
Kashmir by year.
”A chronology of key events
1947 - End of British rule brought result of partition of sub-continent into Hindu
India and Muslim-majority state of Pakistan.
1947 - The Maharaja of Kashmir signs a treaty of accession with India . War
breaks out between India and Pakistan over the region.
1948 - India raises Kashmir in the UN Security Council, which in Resolution 47
calls for a referendum on the status of the territory. The resolution also calls on
Pakistan to withdraw its troops and India to cut its military presence to a minimum.
A ceasefire comes into force, but Pakistan refuses to evacuate its troops. Kashmir
is for practical purposes partitioned
1951 - Elections in the Indian-administered state of Jammu and Kashmir back
accession to India. India says this makes a referendum unnecessary. The UN and
Pakistan say a referendum needs to take into account the views of voters
throughout the former princely state.
1953 - The pro-Indian authorities dismiss and arrest Prime Minister Sheikh
Abdullah, leader of the governing National Conference, after he takes a pro-
referendum stance and delays formal accession to India. A new Jammu and
Kashmir government ratifies accession to India.
1957 - The constitution of Indian-administrated Jammu and Kashmir defines it as
part of India.
1950s - China gradually occupies eastern Kashmir (Aksai Chin).
Indian war with China
1962 - China defeats India in a short war for control of Aksai Chin.
1963 - Pakistan cedes the Trans-Karakoram Tract of Kashmir to China.
1965 - A brief war between Indian and Pakistan over Kashmir ends in a ceasefire
and a return to the previous positions.
1971-72 - Another Indo-Pakistani war ends in defeat for Pakistan and leads to the
1972 Simla Agreement .This turns the Kashmir ceasefire line into the Line of
Control, pledges both sides to settle their differences through negotiations, and
calls for a final settlement of the Kashmir dispute. The Agreement forms the basis
of Pakistani-Indian relations thereafter.
1974 - The Opposition Plebiscite Front in Indian-administered Jammu and
Kashmir drops demand for a referendum in return for extensive autonomy in an
agreement with the Indian government. Sheikh Abdullah becomes chief minister,
and his political dynasty continues to dominate the National Conference and state
after his death in 1982.
1984 - The Indian Army seizes control of the Siachen Glacier, an area not
demarcated by the Line of Control. Pakistan makes frequent attempts to capture the
area in the following decades.
Start of insurgency
1987 - Disputed state elections in Indian-administrated Jammu and Kashmir give
impetus to a pro-independence insurgency centered around the Jammu and
Kashmir Liberation Front (JKLF). India accuses Pakistan of fomenting the
insurgency by despatching fighters across the Line of Control, which Pakistan
denies.
1990 - The insurgency escalates after the Indian Army kills about 100
demonstrators at Gawakadal Bridge. Attacks and threats lead to the flight of almost
all Hindus from the Kashmir Valley area of the state. India imposes Armed Forces
Special Powers Act (AFSPA) in Jammu and Kashmir. 1990s - The insurgency
continues, with Kashmiri militants training in Pakistan and India deploying
hundreds of thousands of troops in Jammu and Kashmir. Violence against civilians
by both sides is widespread.
1999 - India and Pakistan go to war again after militants cross from Pakistani-
administered Kashmir into the Indian-administered Kargil district. India repulses
the attack, accuses Pakistan of being behind it, and breaks off relations.
2001-2004 - Moves to boost relations between the two countries are punctuated by
continuing violence, notably an attack on the parliament of Indian-administered
Jammu and Kashmir in Srinagar in 2001.
2010 - Major protests erupt in the Kashmir Valley of Indian-administered Jammu
and Kashmir over the summer after a demonstrator is killed by the Indian army.
The protests abate in September after the government announce measures to ease
tension.
2011 August - Chief Minister Omar Abdullah announces an amnesty for the 1,200
young men who threw stones at security forces during the anti-government protests
in the Kashmir Valley the previous year.
Indian State Human Rights Commission confirms presence of more than 2,000
unidentified bodies in unmarked graves near the Line of Control. Activists say
many may be people who disappeared after being arrested by security forces.
2011 September - Indian forces kill three Pakistani soldiers in firing across the
Line of Control. India accuses Pakistan of opening fire first.
2013 September - Prime ministers of India and Pakistan meet and agree to try
reduce the number of violent incidents at their disputed border in Kashmir.
2014 August - India cancels talks with Pakistan after accusing it of interfering in
India's internal affairs. The decision comes after Pakistan's High Commissioner in
Delhi consulted Kashmiri separatist leaders in advance of the talks.
During a visit to the disputed border state of Jammu and Kashmir, India's Prime
Minister Narendra Modi accuses Pakistan of waging a proxy war against India in
Kashmir.
2014 October - Pakistan and India exchange strongly-worded warnings, after a
flare-up of violence across their common border leaves at least 18 people dead.
BJP joins government
2015 March - India's ruling BJP party is sworn into government in Indian-
administered Kashmir for first time in coalition with local People's Democratic
Party, with the latter's Mufti Mohammad Sayeed as chief minister.
2015 September - Muslim separatist leaders in Indian-administered Kashmir close
shops, businesses and government departments in protest at the enforcement of a
colonial-era ban on eating beef.
2015 November - One person dies in violent protests following a visit to Indian-
administered Kashmir by Prime Minister Narendra Modi.‟‟
Sir Creek:
It is very important territory for India due to oil and gas resources. The
demarcation of the line in Sir Creek, at the western terminus of the boundary of
India and Pakistan in the Run Of Kutch and it is unresolved since 1969. The
boundary was demarcated by the tribunal which did not considered necessary to
take up the question regard to the 100 km stretch of sir creek because it is the part
of Pakistan as in 1908 when the clash started between the ruler of Run of Kutch
and Sindh then British Indian Government annexed this territory to Sindh Side.
Pakistan sought negotiation to resolve the issue but India wished an air survey first.
In 1989 surveyors general of both countries met but could not reach on any
agreement. It is will of poor fishermen on both sides to start up the negotiation
because hundreds of fishermen arrested by the coastguard as they did not the law
of demarcation or any other law regarding the boundary line.
Siachen Issue:
Siachen means „the place of wild roses‟ .Siachen glacier is the great
Himalayan watershed that demarcates central Asia from the Indian sub-continent,
and that separates Pakistan from China in this region .It is the world‟s second
longest non-polar glacier, and thus is sometimes referred to as the third pole .It is
70 km long and flows from an altitude of 5750 meters to 3620 meters above sea
level.Siachen is known as the world‟s highest battlefield between India & Pakistan.
Troops are deployed at elevations of up to 6,700 metres (22,000 feet) at minus 60
degrees C. Siachen conflict began in 1984 when both India and Pakistan, began
sending mountaineers, in an attempt to lay their claims over the area. Several
skirmishes took place till 2003 when a cease fire was declared. The roots of the
conflict over Siachen lie in the non-demarcations on the map northward to the
China boundary beyond NJ9842, which is the line‟s “dead end” in the India-
Pakistan line of control agreement. The 1949 Karachi agreement and the 1972
Simla agreement presumed that it was not feasible for human habitation to survive
north of NJ9842. UN officials presumed there would be no dispute between India
and Pakistan over such a cold and barren icy wasteland .The contentious area is
only 900 square miles (2,300 km2) Indians control the heights while the Pakistanis
control the glacial valley. As a result, Pakistanis cannot climb up, and Indians
cannot come down .Together, the two nations have about 150 manned outposts
along the glacier, with some 3,000 troops each .Over 2,000 soldiers have died at
Siachen. More soldiers have died from frost bites, cold and avalanche i.e. harsh
weather rather than combat. The talks for demilitarisation of Siachen did take place
between India and Pakistan in May 2011, but failed to reach any agreement.
The truth remains that this stretch of icy wasteland holds no political or economic
importance to the billion and a half residing on both sides of the border.
Wullar, Salal, Baglihar and Kishenganga Projects:
The Indus Waters Treaty of 1960 allow the run of the river power plants but
restricted the construction of dams on the western rivers it is compulsory for India
that whenever she plan any project to interfere with the flows of river, it is under
the treaty that provide relevant data to Pakistan. In 1970 India decided to construct
a dam on the Chenab River at Salal. After the failure of Indus Commission to settle
the issue, the issue taken up the level of government. And India agreed to reduce
the height of dam.
Another question arose in 1980s on the construction of a barrage on the
Jhelum River at the mouth of Wullar Lake. Pakistan raised the issue in the
commission in 1985 but veined. Pakistan asked India to discontinue construction,
after some delay India suspended construction. It asked India to acknowledge that
the project was inconsistent with treaty and in 1989 India offered change design
and operating procedure. However no agreement was reached despite of meeting
on commission as well governmental level.
Another issue is when India decided to build a hydroelectric power project
on the Chenab River with a dam at Baglihar upstream from the Salal dam. “The
reservoir was far in excess of the prescribed limit and would enable India to
manipulate the flow of the river in a way that would lead to either complete
stoppage for up to twenty eight days during the critical wheat growing period of
December to February, or open the flood gates to inundate the land in Pakistan. At
first India did not provide the requisite data about the project in advance and then
delayed a visit by the Pakistani experts to the site as required under the treaty” in
2001 to 2004 at Indus commission level and in 2005 at governmental level
negotiation took place but not progressed. Then Pakistan decided to refer the
matter to World Bank. As a result the height of dam reduced by 1.5 meters and size
of pondage by 14 %. India planned to build a power project on the Kishenganga
tributary of the Jehlum river. Pakistan protested that diversion of stream would
violate the Indus Water Treaty.
Trade relations
Both country have long confrontation since independence. War of
1948,1965,1971, Kargil issue 1999, dispute on line of control, allegation of spies
from both side are the phases of bad relation between both states .In the context of
trade relation between them. The unified economy of sub continent divided after
independence. Pakistan refused to follow the same pattern of devaluation currency
as India did and this step annoyed India and the trouble in trade got started.
Founding father of Pakistan believed trade is the way of peace and harmony
between two separated country of sub continent. But huge migration from both
side, bloodshed and controversial annexation of Kashmir created deep suspicious
to both neighboring state. The suspended relation of trade in 1949 and 1950 again
started in 1951India was Pakistan‟s largest trading partner, and this continued to be
the case until 1955–56. Another break up in trade was resulted by the war of 1965,
but Tashkent Pact in 1966-67 again clear the way for trade but on limited scale.
War of 1971 disturbed the trade environment once again and Shimla pact 1972
gave another chance to trade relation. 1989 nuclear testing, attack on Indian
parliament in 2001, once again suspended the relation of good neighbor. Year of
2002 marked stable bilateral and trade relation after relaxing on boarder. In
November 2011, the government of Pakistan announced its decision to grant Most
Favored Nation (MFN) status to India. This means that India, in principle, will
enjoy lower tariffs and fewer trade barriers in its economic relationship with
Pakistan. The decision, which followed New Delhi‟s extension of MFN status to
Pakistan in 1996, underscores Islamabad‟s willingness to deepen commercial ties
with its long-time nemesis.
India and Pakistan were dependent on each other at the time of independence. The
General Agreement on Tariffs and Trade (GATT) was negotiated almost at the
time of Partition. The founding members of GATT, keeping in view the fact that
the Subcontinent was more or less a single economy, allowed special dispensation
for the two countries under Article 24 (paragraph 11) of GATT. The accord was
signed by 23 countries, including Pakistan and India, on October 23, 1947. India
ratified GATT on July 8, 1948, and Pakistan followed suit on July 30, 1948.
Between 1948 and 1965, Pakistan and India used a number of land routes for
bilateral trade. These included eight customs stations in Punjab province at Wagah,
Takia Ghawindi, Khem Karan, Ganda Singhwala, Mughalpura Railway Station,
Lahore Railway Station, Haripur Bund on River Chenab, and the Macleod Ganj
Road Railway Station1. Article 24/paragraph 3(a) of GATT, even signed a bilateral
agreement on December 22, 1957, to facilitate border trade. It must be noted that
political leadership did not involve the issues of the time of independence with
trade relation.
1 Moving Toward Pakistan-India Trade Normalization: An Overview ZAFAR MAHMOOD
1948-1949, Indian share in Pakistan‟s import and export was23.6% and 50.6%.
which recorded decline to 1.3 % and 0.6% in 1975-76 2.(table1)
India‟s share in Pakistan‟s global import and export
YEAR IMPORT EXPORT
1948-49 23.65 50.6%
1975-76 1.3% 0.6%
Table1 Source: Trade Map, International Trade Center, Geneva
Pakistan‟s share in India global Import and export was 2.2 and 1.1 respectively in
1951-52 which went down to 0.7 % and 0.13% in 2005-06.
In 2001 India‟s trade with Pakistan in import was 164.4 US million which
increased to 2235.5 $ Million in 2010 with the difference of 2,071.2US $ million.
Trade balance estimated 1183US$ million in 2010. After Parliament attack in India
2001, a declined on export marked by the difference of 36US$ million. But the
trade volume was 153 us$million in 2002. Import in 2010 was 2235.8 US
($million) and export was comparatively low from 2009. Trade volume declined to
1183. US ($million) in 2012 which was 1400. US ($million) in 2009. (table2)
India‟s trade balance with Pakistan US($million)
2 Ghuman, R.S, Indo-Pakistan Trade Relation,New Delhi:Deep And Deep Publication,1986 and Federal Bureau
Islamabad as quoted in Ghuman R.S and D.K Madan(2006)
Year 2001 2002 2003 2004 2005 2006 2008 2009 2010
import 164.6 187.7 183.7 522.1 593.1 1235.0 1772.8 1445.8 2235.8
Export 69.9 33.9 98.1 79.1 165.9 286.1 372.0 272.1 248.4
trade 94.7 153. 115. 442. 427. 948.6 1297. 1400. 1183.
Source: Trade Map, International Trade Center, Geneva (table2)
Improved trade relations were witnessed in March 2011 after revival of Pakistan
India dialogue. One of the reasons could be globalization which promoted regional
co-operation on economic grounds in the region. Bilateral trade was initiated by
business communities at both sides in spite of the existing conflicts (Askari, 2012).
From 2001 to 2010 sugars and sugars confectionery, cotton, manmade fillments,
organic chemicals, residue s,waste of food industry and animal fodder was top
product of export to Pakistan from India (table3)
India‟s top export to Pakistan (US$MILLION)
Product 2001 2010
sugars and sugars
confectionery
61.91 613.33
Cotton 0.66 320.04
manmade fillaments 0.01 300.39
organic chemicals 28.54 252.13
, residues ,waste of food
industry and animal
fodder
7.90 75.52
Source: Trade Map, International Trade Center, Geneva (table3)
Vegetables, chemicals, raw material and textile and clothing remained top product
for import and export between India and Pakistan. They share 18.57 and 21.09
import and export product share in vegetables and 22.84%,19.81% share import
and export in chemical respectively (table4)
Import and export of products between India and Pakistan 2014
Products Import US$
thousands
Import product
share %
Export US$
thousands
Export product
share
Vegetables 390,858,43 18.57 82,701.33 21.09
Food products 219,514,64 10.43 3,175.44 0.81
Minerals 2,570.39 0.12 55,620.70 14.18
Fuels 36,618.54 1.74 7,931.83 2.02
Chemicals 36,618.54 22.84 77,704.58 19.81
Plastic and
rubber
195,887.15 9.31 18,848.73 4.81
Textile and
clothing
483,440.41 22.97 77,704.58 19.81
Metals 56,603.36 2.69 52,302.94 13.34
Raw material 572,683.37 27.1 192,425.24 49
Source: worldbank.org (table4)
Synthetic Filament Yarn Woven Fabric is the 169th most traded product and the
785th most complex product according to the Product Complexity Index (PCI).
The top exporters of Synthetic Filament Yarn Woven Fabric3 are China ($8B),
South Korea ($1.97B), Other Asia ($1.55B), India ($1.1B) and Japan ($1.06B).
The top importers are China ($1.74B), the United Arab Emirates ($1.66B),
Vietnam ($1.1B), the United States ($826M) and Indonesia ($757M). Pakistan
import 26% Synthetic filament yarn woven fabric from India in 2009 and 64% in
3 A yarn composed of continuous filaments assembled with or without twist. filling in a woven fabric, the yarn
running from selvage to selvage at right angles to warp. Each crosswise length is called a pick. In the weaving process, the filling yarn is carried by the shuttle or other type of yarn carrier.
2013 amount of $113m. pakistan 2nd
partners in Synthetic filament yarn woven
fabric is China with sharing of 27%.
What does pakistan import from india
Product 2009 2010 2011 2012 2013
Synthetic
filament yarn
woven fabric
26% 2.7% 3.6% 5.9% 5.6%
Cyclic
hydrocarbons
14% 8.3% 15% 12% 7.3%
Raw cotton 8.8% 17% 16% 10% 15%
Soyabean
meal
5.4% 6.6% 9.7% 14% 13%
Onion 4.2% 0.94% 1.5% 1.6
Raw sugar 19%
Tomatoes 4.2% 6.0% 5.9%
(table5) Source: http://atlas.media.mit.edu
Import in cyclic hydrocarbons was in number two with india in 2013 which was
comparetively low from 2010 to 2012. 145$M import done in 2013 of cyclic
hydrocarbon.here is a review on pakistan‟s import in cyclic hydrocarbon with other
counties. India is in 2nd
number.(table5,6)
Import of pakistan in cylic hudrocarbons from other countries.
Kuwait 39% $240M
India 24% $145M
Oman 13% $81.2M
Saudi Arabia 13% $79.4M
(table6) Source: http://atlas.media.mit.edu
Pakistan‟s import raw cotton with india is about 39% in 2013 with the amount of
$301M. other partner was Afghanistan and US.(table 7)
Pakistan‟s import of RAW COTTON
India 39% $301M
Afghanistan 24% $127M
US 20% $151M
(table 7) Source: http://atlas.media.mit.edu
Pakistan‟s imprt volume in soyabean was $333M in 2013. Pakistan gradually
increased its tarde volume in soyabean from 2009 which was 5.4% and became
80% in 2013 with amount of $269M. (table8). 97% import to Pakistan from India
of tomatoes remained at high level.(table 9). Pakistan have three trade partner in
onion India, China and Afghanistan respevtively. But ranking wise India Import
40% onoin to pakistan (table10)
SOYABEAN
India 80% $269M
Afghanistan 20% $66M
(Table8) Source: http://atlas.media.mit.edu
Tomatoes
India 97% $123M
(table9) Source: http://atlas.media.mit.edu
Onion
India 46% $32.2M
China 34% 23.5M
Afghanistan 20% 13.6M
(table10) Source: http://atlas.media.mit.edu
Now the other look on the side that what did pakistan export to india from 2009 to
2013. In 2009 toatl pakistani export to india was Total: $283M. Tropical Fruits4.
Refined petroleum and cement was top product with the amount of $44.4M,$41.3
and $34M respectively. $343M amount of export to India from Pakistan in 6 fields
of minerals products, tropical fruits, hydrocarbons, non retail pure cotton yarn, raw
lead, and polymers 2010. Once again tropical fruit, cement and refined petroleum
remained on top. 17% export to India from Pakistan recorded in Tropical fruits
estimated amount $58.4M. exported amount to India was $399M, that is divided
in major area of product which is composed of gypsum ,raw sugar, f minerals
products, tropical fruits ,hydrocarbons, non retail pure cotton yarn ,r aw lead ,and
polymers. Topical fruits rose at the percentage of 25% value of $97.7M. (table11)
What does Pakistan Export to India
Products 2009 2010 2011 2012 2013
Tropical Fruit 16% 17% 18% 6.8% 25%
Refined
Petrolium
15% 6.9% 9.3% 5.5% 6.4%
Cement 12% 9.2% 10% 6.5% 6.4%
Poly 7.2% 3.9% 2.4 1.8% 3.7%
4 tropical fruits A variety of fruits, usually of exotic origin, more or less available in the West.
carboxyclic
Acid
Heavy Pure
Woven Cotton
6.0 3.8% 2.2% 1.6% 2.7%
Cyclic
Hydrocarbons
5.3 3.4% 6.6%
Raw Lead 5.8%
Gold 8.6%
Scrap Copper 29%
Raw Cotton 13%
(table11) Source: http://atlas.media.mit.edu
Fruits are valued as protective food. These are rich in minerals, vitamin A, B and
C, and provide more energy per unit weight than the cereals. Pakistan's wide range
of agro-climatic conditions allow production of a variety of tropical and sub-
tropical fruits. Fruits and vegetables consumption is steadily increasing in Pakistan.
As economies develop, consumers need high value and quality products. There,
also, is an emerging demand for organic fruits. Table 12 shows the trade of tropical
fruits with India. 2nd
exporter is Afghanistan but if Pakistan wants it will develop
the area of fruit tropical with India and increase percentage as well.
Pakistan is also a major exporter in tropical fruits and cement to pakistan.
Where does India Import Tropical Fruits from
Pakistan 39% $97.9M
Afghanistan 27% $67.1M
Iraq 20% $50.4M
Source: http://atlas.media.mit.edu (table 12).
Cement
Pakistan 45% $25.3M
Bangladesh 22% $12.5M
China 9.2% $5.19M
Source: http://atlas.media.mit.edu/en/
It is the review of trade between india and pakistan in which different phases and
hurdeleds discussed. A look also upon major imprt and export between two
countries in which they can improve their relations in term of need and demand.
After being progress bilateral relation in trade there are still fears of India‟s
economic dominance in the minds of the Pakistani private sector and political
leaders. India has a huge trade balance in its favor with other SAARC countries,
and a constant fear in the minds of analysts is that owing to a large industrial base
and a restrictive import regime, the trade imbalance between Pakistan and India
will further disturbed. The Pakistani private sector complains of a non-cooperative
attitude of import regulators in India. In the way of normalization process of trade
there are also a need of composite dialogue in other track as well. Pakistan always
courage trade normalization but when it reserves it show serious implication. „‟By
opening wide the doors of our hearts we can broaden our horizon ‟‟ , India is huge
economically state so India should need to strengthen its economic relation with
other small state so that step can also minimize the tensions and problems. India
imposes strict restriction to Pakistan on the other hand Pakistan had little too on
India, this difference need to be solved for betterment in trade. There are lobbies in
Pakistan that believe that due to India‟s large industrial base and economies of
scale, Pakistan‟s market will be swamped with Indian products that damage
Pakistan‟s industry. The impression that trade liberalization with India is creating
unemployment in Pakistan must be avoided at all costs, in order to prevent a
political and social backlash and to make the process sustainable. Other countries
can also help to normalize the trade relation in India and Pakistan that can further
boost the way of peace and stability of South Asia. A mature steps need to be taken
to hamper the concern of private sector in Pakistan regarding trade. There is also a
perception that law and enforcement forces in Pakistan related to security issue do
not wants the good relation of trade between India and Pakistan but this is totally
wrong because if we look at the past it reflects that always political entities created
hurdles in trade rather than security forces. This is further validated by the fact that
Pakistan‟s trade relations with India were on an MFN-basis under military
governments, which were in power starting in 1958. Bilateral trade thrived during
those periods. Despite all this discussion the main point is only political stability.
We see that when the political relation of both country on a smooth track the other
relations in term of social ,moral, and specifically economic ties would
automatically remain develop, and when there would be any break through and
issues raise again than the other kind of relation must went down. Political
momentum definitely will play a significant role for Pakistan‟s trade position.
Major risks
John F Kennedy says that „‟ there are risks and cost to action ,but they are
far less than the long range risks of comfortable inaction‟‟. But there are fear in
India and Pakistan to take any risks regarding trade. The risk major is make trust
upon each other, due to its past painful history. Pakistan and India both were
hostile rivals after and before some time of independence. And the remaining gap
of trust filled by war , and security issues. And that situation of mistrust dominate
the thinking power to both sides. It will take some time to build the process of trust
if it will take seriously by continues manner. Because it‟s a serious concerns in
business community that if there will be a disturbance on political level it may
effect the efforts of investors too. It always be recommended that if there will b
any crisis on policy level it should be solve by engagement rather then withdrawal.
And suspended relation also disturb the seriousness of businessmen.
The role of media is quite powerful that can change the mind of people. It
always happen that media exaggerate the news regarding issues between indo
Pakistan. Media can create such environment that may raise the risk in trade
relation. A negative image of Indian economy may be transmitted to Pakistan for
change the mind in trade or may be through any incident media can cut the way of
trade. Media can use its power in positive side as well. Through talk shows,
seminars, conferences and programs by presenting benefits of normalize relation in
trade it will open new progressive way.
Inefficient manufacturing firms also lobbying that cheap products from other
country will destroy the domestic trade and jobs because trade liberalization may
effect them. On the other side trade liberalization will be the reason of expansion
of business to both side of country. A strong measure need to be taken through
tactics for this lobby.
Another risk which is well known is one and only political role somehow in
negative role more. A serious, committed, and continues set back of composite
dialogue is need of time if it will not proceed forward then whose are not wants to
see normal relation in trade in India Pakistan they would use the government
through emotional frame. But with the passage of time it is now good sign both
country is serious in betterment of normal relation.
Ships are required to touch a third country port (e.g. Dubai or Singapore)
before delivering import goods, except limited ports of call between Karachi and
Nava Sheva (in Gujarat).
„‟ One of the major problems impeding larger India-Pakistan trade flows is the
poor state of logistics. The World Bank Logistics Performance Index that measures
the efficiency of the customs clearance process, quality of trade and transport-
related infrastructure, ease of arranging competitively priced shipments,
competence and quality of logistics services, ability to track and trace
consignments, and frequency with which shipments reach the consignee within the
scheduled or expected time, places both countries quite low. Although the new
integrated border check at Wagah-Attari would allow 10 times more trucks to
cross, other logistics snags have to be dealt with quickly. Special task forces with
adequate powers should be formed for at least the first year to solve the problems
and facilitate flows of goods and people‟‟.
Findings:
After the independence the founder of Pakistan wanted the peace and
harmony between two states and the solution of such issues according him
would be trade.
Being a neighboring state there is a trade potential in India and Pakistan if
the process of others track in form of security issues do not hamper the trade
relation.
India is a huge economic country and Pakistan is also finding new markets
to stabilize its economy. Being a nearer neighbor to India, Pakistan should
need to take advantages besides issues.
The role of politician is quite important in good trade relation because the
policy makers could provide the straight way in trade or they can also
diffuse the ongoing process too.
There is also a need on the side of India to reduce the fear in Pakistan and
behave fairly in spite of context of security threats.
Pakistan and India find out the new paths of investment, import and export
opportunity in which they pay a lot in other far countries may be the relevant
area is next to the door where they get advantage in less amount.
Media, people to people link, civil society will also play a significant role in
good trade relation.
Recommendations
1. Travel (visas, air/road/railway transport) must be facilitated to promote
competitive trade in goods and services that benefits small and medium-
sized firms, to tap into the large pool of Indian skilled workers, gain access
to Indian farm and other technology, and encourage cross-border tourism.
2. India is very stable and progressed in Information Technology but are faced
with increasing labor costs. They can sub-contract some of the work to
Pakistani firms at rates that are relatively cheaper than what they pay in
India and thus maintain their market share. And by this Pakistan can also get
new ideas in IT fields and experts as well.
3. Businessmen have to travel frequently to different places at short notice . No
discrimination between large and small businessmen should be allowed in
granting visas.
4. Whenever a terrorist activity happen it directly effects the on going process
of trade relation. There must be a need to full the vacuum of trust regardless
the worst situation.
Conclusion:
Mutual co-existence and peace is only the solution, not the war and today both
country have come to know that bilateral trade relation can enhance the friendly
relationship between them. There is no guarantee that whether this will be a
smooth process in normal relation or not but it will show a change and we can give
the space to any kind of change it may be, will show the path of right way which
further go the ultimately solutions of our long term hostility.
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