EAM’s address to Federation of Pakistan Chambers of Commerce & Industry, Karachi
I am very glad to be present here this morning and interact with this distinguished gathering of the business community in Pakistan. I am grateful to the Federation of Pakistan Chambers of Commerce & Industry for kindly providing the platform for this interaction.
I have returned to Karachi after a gap of 23 years and it is with a feeling of affection and nostalgia that I see many of the prominent landmarks of this great City.
As I take an overview of the economic and commercial relationship between India and Pakistan and the manner in which it has progressed in the past 18 months or so, there are numerous positive developments.
- Firstly, economic and commercial contacts between the two countries have rapidly grown in this period. This greater intensity to business-level contacts has encouraged thinking and discussion about joint ventures, technical collaborations, and better marketing strategies in either country. This is a most encouraging sign.
- Secondly, there has been excellent participation by business communities of both countries in trade fairs and exhibitions in the other country.
- Thirdly, there are rapid developments beyond conventional trading, and this is in the area of services – in particular tourism, IT, civil aviation, shipping services, medicine and tele-medicine and banking.
- Fourthly and finally, there have been developments which inspire confidence that there is an emerging environment in which it would be possible to restructure the infrastructure of trade and economic cooperation.
In this regard, I refer, in particular, to the small beginning which has been made with regard to direct trade through the Attari-Wagah border, the good possibilities which exist for such trade on the Srinagar-Muzaffarabad and the Khokrapar-Munabao routes, the interest which has been shown in the Mumbai-Karachi ferry service and the on going discussion on expanding the scope of the present civil aviation and shipping protocols between India and Pakistan.
The points I have mentioned so far provide a bird’s eye view of the present conjuncture of economic and commercial cooperation between India and Pakistan. There is a more general environment also to which I must refer. Both the Pakistani and Indian economies are in the midst of a major growth spurt. This provides a most favourable environment to conceive new concepts and ideas of how we can mutually benefit from existing complementarities between the two countries.
Secondly, the regional institutional environment, particularly given the impetus which has been provided by SAPTA and SAFTA, is also more commerce and business sensitive than perhaps, it has ever been. Finally, the current international environment has also provided further impetus to efforts in both India and Pakistan for expanding bilateral economic cooperation.
In this context, I would refer, specifically, to the burden that increase in the price of hydro carbons has placed on both our economies and the fact that we have, today, instruments which would enable us to alleviate that burden by cooperation with third countries. Transnational pipelines, therefore, immediately come to mind and this is an area which is of immense significance to all of us.
Having sketched this general background, let me come to specifics. There is a lot of scope for cooperation in many areas such as agriculture, chemicals, textile machinery, hydropower, drugs and pharmaceuticals, cotton industries, to name a few. For example, Pakistan can export cotton yarn, textile fabrics, surgical instruments, sports goods, electric fans and water coolers to India. We can even look at import of power from Pakistan if Pakistan has surplus power.
India has recently offered liberalizing import of 116 tariff lines of interest to Pakistan in SAFTA. We are ready to look at non-tariff barriers within the ambit of the Joint Study Group. Similarly, India is in a position to fulfill Pakistan’s annual demand of 100,000 units of vehicle tyres but the 46% import tariff on this item acts as a deterrent. We understand that there are certain industries which need to be protected. We urge Pakistan to make a negative list of these and open the rest for regular trade or atleast open those items that she presently imports from elsewhere to Indian trade. This would go a long way in enhancing economic cooperation between the two countries.
I can, confidently assert that the business environment today is more favourable than it has ever been between India and Pakistan. This poses a challenge for those of us in government and equally for the business community in both countries. I do believe that the role of government should be to facilitate to the fullest extent possible contacts between the business communities of the two countries. In this spirit, we would welcome suggestions from businessmen in Pakistan on what we can do in specific and precise ways to advance cooperation between the two countries, turn our backs on the barriers and suspicions of the past and in some way endeavour to create and encourage the spirit of enterprise for businessmen in both the countries.
Equally, there is a challenge for the business community of both countries. As I said, the environment which exists today, because of a number of conjunctural forces and factors, is in many ways unique. It is for you to make full use of it. I am aware of the considerable increase in trade which has already taken place in the last 12 months. This is a most encouraging sign since what, more than anything else, led to this spurt in our trade was only a more open visa regime than existed previously.
Once we have better banking, airline, shipping and road transport linkages with each other, clearly, the results will be even more significant. It is our expectation that in the next few months there will be considerable advances in each of these specific sectors. We are on the threshold of a major expansion in people-to-people and business contacts. The re-opening of the Consulates General in Mumbai and Karachi reflects the desire of both
governments to facilitate the expansion of such contacts to the fullest extent possible.
Another important milestone will be the opening of Khokrapar-Munabao train route. These developments will facilitate cooperation between Western India and Southern Pakistan to a far greater extent than before. Karachi is poised at the threshold of a great expansion as Pakistan moves to harness its potential as a "hub country" as Foreign Minister Kasuri said at our talks in Islamabad.
It is my belief that the expansion in trade and economic cooperation between India and Pakistan will lead Karachi to a even more successful and qualitatively new stage of its evolution as a trading and commercial capital of Asia and the World. The spirit of its citizens and the enterprise of its businessmen are well known to everyone in India. I hope that this spirit and enterprise are harnessed to the cause of expanding economic and commercial cooperation between India and Pakistan for the betterment of our whole region.
I expect that the citizens and the business community of Karachi will lead the way forward in building a new future for the people of India and Pakistan.