Let trade drive Indo-Pak ties, says Kamal Nath

Urging India and Pakistan not to carry the baggage of the past and look ahead, Commerce and Industry Minister Kamal Nath today said the trade between the two countries had the potential to grow to $5 billion within the next two years, provided free trade was allowed.

Addressing a congregation of about 100 Pakistani businessmen in Islamabad, Nath pointed out, "The two-way trade between the two countries at $400 million formed a minuscule percentage of the total global trade, while the indirect trade transacted through other nations amounted to $2 billion annually."

This was a clear indication that both countries should go beyond their political differences and strive towards cooperation on the trade and economic front, the minister said, who was scheduled to meet President Pervez Musharraf.

A separate study by the PHD Chambers of Commerce and Industry (PHDCCI) indicated that both the countries have been making efforts at not letting political tensions come in the way of trade. According to the study, India's trade with Pakistan grew by over 30 per cent in 2003-04 as compared to the previous year, reflecting a thaw in relations between both the countries.

While India's exports to Pakistan increased by 32 per cent, its imports from its neighbour went up by 22 per cent, according to the PHDCCI study.

"If Pakistan accords Most Favoured Nation (MFN) status to India, the trade between the two countries has the potential to grow exponentially since the trade that is taking place through the non-official route and third countries would then be direct," the chamber President Ravi Wig said in a statement here today.

He said a surge in India's trade with Saarc was a good turning point for the country to consolidate the trade with the countries in the region and to take it to a higher growth trajectory. During 2003-04, India's trade with Saarc moved up by 75 per cent, the study said.

According to the analysis, India's trade with Bhutan registered the highest growth, rising by over 700 per cent. While Indian exports to Bhutan registered a 112 per cent growth to Rs 399.1 crore last fiscal, imports also went up by a whopping 1,400 per cent to Rs 2,406.5 crore over the previous year.

Giving credence to the Free Trade Agreement between India and Sri Lanka, the trade between the two Asian neighbours grew by 42 per cent, with total trade touching Rs 6,960.9 crore in 2003-04. India's exports to Sri Lanka have gone up by 36 per cent to Rs 6,067.36 crore, while imports were up by 103 per cent in 2003-04, it added.

As per the chamber's analysis, Bangladesh has emerged as India's largest trading partner in the region, accounting for 41 per cent of the official exports from India to the whole Saarc region in 2003-04.