The main hurdle to Pakistan granting the much-awaited most-favoured nation (MFN) status to India is Pakistan’s agricultural lobby which fears that subsidised products from India would hamper the livelihood of the Pakistani farmer, according to Ishrat Husain, former governor of the State Bank of Pakistan.
“There has been some unexpected delay due to the concerns expressed by the agricultural lobby in Pakistan. This is wrong. As agriculture production is cyclic in nature and the cycles in the two countries may not always coincide, it will be advisable, in the interest of price stabilisation and food security, to allow imports from each other’s countries when crops fall short of the normal demand,” said Husain.
He also said the trade surplus that India enjoyed with Pakistan should not be a cause of concern and should not act as a reason for Pakistan to not grant MFN status to India.
“There is hardly any doubt that India-Pakistan trade is a positive sum game in which both the countries will benefit. Despite all measures, there is hardly any chance of dislocation or disruption to either India or Pakistan. Trade imbalance in favour of India should not be a source of worry, but a reflection of the relative economic size,” Husain said here today, while addressing a lecture on ‘Normalising India-Pakistan Trade Relations’ organised by Indian Council for Research on International Economic Relations.
Husain also said if bilateral trading relations became normal, Pakistan’s exports to India would not exceed one per cent of its total exports, while Indian shipments to Pakistan would remain within the range of six-seven per cent.
Husain said while both India and Pakistan had taken some unprecedented steps in creating an effective trading relationship, the key to a successful business relationship lay in implementing policies and ensuring that ongoing political tensions didn’t act as an impediment in a normal business relationship between the two neighbours.
“Tense security situations such as the recent firings across the Line of Control would cause temporary disruptions, but these should not be taken as the pretext for hardening of the attitudes on both sides,” he added.
