A World Bank Report has estimated that the potential of the bilateral trade between India and Pakistan, without barriers could reach $37 billion dollars, reported the Dawn.
The report A Glass Half Full: The Promise of Regional Trade in South Asia” said that India and Pakistan have merely scratched the surface of their bilateral trade potential.
The report added that the lack of normal bilateral trade relations between the two countries affects the formation or deepening of regional value-chains in various high-value trading sectors.
The reports has highlighted among key factors, the long list of product restrictions in bilateral trade. India and Pakistan continue to maintain long, sensitive lists of items on which no tariff concessions are granted.
Pakistan has a list of 936 items and almost 17.9pc of tariff lines that apply to imports from all Safta countries. India maintains a list of 25 items (0.5pc of tariff lines), which includes goods such as alcohol, firearms, etc.
However, it has a much longer, 64-item list, (almost 11.7pc of tariff lines) for Pakistan and Sri Lanka, but which effectively applies only to Pakistan, because India applies a smaller sensitive list to Sri Lanka as part of a separate India-Sri Lanka Free Trade Agreement.
Items on the Indian sensitive list can be imported at the most-favoured-nation tariffs from any Safta country, including Pakistan, because India accorded Pakistan the status in 1996, soon after the accession of the two countries to the World Trade Organisation. However, Pakistan has not granted India the most-favoured-nation’s status or non-discriminatory market access.
