After allowing foreign direct investment (FDI) from Pakistan, India is likely to take more steps to create an environment conducive for commerce secretary-level talks between the two countries, expected next month.
It is expected the finance ministry would, in a week, notify a Cabinet decision to reduce the peak customs duty rate to five per cent in 264 tariff lines in three years. Following this, it, along with the Reserve Bank of India (RBI), would notify outbound FDI from India to Pakistan before the secretary-level talks.
Talks on trading in power, as well as the possibility of using India as a transit point for transporting imported gas to parts of Pakistan, are already underway. Commerce Secretary S R Rao said RBI would set up a screening committee to clear outbound FDI from India. He said the finance ministry was expected to notify a 30 per cent reduction in the SAFTA (South Asian Free Trade Area) sensitive list, which means peak customs duty on 264 tariff lines would be reduced to five per cent in a three-year period.
When asked whether the domestic textile industry’s concerns had been taken on board, Rao replied in the affirmative. He said there was no concern that Pakistan textiles would swarm India’s markets.
Meanwhile, Delhi-based Punjab National Bank has sought clarification on capital adequacy ratio to open two branches in the neighbouring country.
Secretary-level talks between India and Pakistan were expected in May, but these did not materialise then. It is learnt Pakistan’s foreign ministry had asked its commerce counterpart not to proceed with talks before there was clarity on issues like Siachen and Sir Creek. Now, External Affairs Minister S M Krishna would hold talks with his Pakistan counterpart Hina Rabbani Khar next month, after which commerce secretary-level talks would be held.
Commerce ministry officials, however, did not specify the date when the two secretaries would meet.
Also Read
It is also learnt the signing of visa liberalisation norms between the two nations, expected to be carried out at the secretary level, would now be shifted to a ministerial level. Rao said a joint working group on electricity between the two countries had met twice. The group is discussing the possibility of linking a grid in Amritsar with one in Lahore. A joint working group on petroleum is holding discussions and officials said New Delhi was impressing upon Islamabad the idea of using India as a transit point to transport imported gas from Bombay High to Bhatinda.
From there, gas could be transported to various parts of Pakistan through pipelines.
Officials said at the commerce secretary-level talks, the issue of starting a direct flight between Islamabad and Delhi would also be taken up. If Pakistan was interested, the issue would be taken up by the civil aviation ministries of the two countries, they added.