Shahid Afridi is the brand ambassador for Dabur’s Hajmola digestive candy: Right or wrong? Right, but you wouldn’t know because you don’t get to see those advertisements here — the cricketer endorses the brand only in Pakistan. But you can see it on YouTube; it’s not very different from cricketer-focused advertisements in India.
Dabur has a company in Pakistan called Asian Consumer Care, which did business of Rs 15.87 crore in 2008-09 and Rs 19.24 crore in 2009-10. The size is small but annual growth is upwards of 30 per cent. Apart from Hajmola, it also sells Dabur Amla hair oil and Dabur Vatika personal care products. True, its plans to set up a packaging unit have not fructified and Pakistan does not feature on its list of priority markets; but quietly the homespun maker of fast-moving consumer goods seems to be establishing a presence across the border.
Before you jump to any conclusion, let me tell you there aren’t too many such examples. The bonhomie between the business communities of the two countries that had built up some years ago seems to have dissipated. Apart from Dabur, few Indian companies seem to be doing business in Pakistan. The Tata Group wanted to set up a power plant there and TCS had talked of a centre there. All these plans appear to be in cold storage. But there has been some movement: Afzal Motors of Pakistan has set up an assembly plant in Karachi to assemble Tata Daewoo trucks.
Unrecorded trade between the two countries continues to flourish. A business leader, on a recent visit to Pakistan, was surprised to find the machinery in a textile mill made in Bangalore! It had come first to Dubai and then to Karachi. The trade routed through West Asia, Far East and Central Asia is, in fact, huge. Some estimates suggest that it could be thrice the size of the officially-recorded figures. Take a look at the numbers.
India’s exports to Pakistan had risen steadily from $286 million in 2003-04 to $1.9 billion in 2007-08. Then the 27/11 attacks on Mumbai happened. Terrorists based out of Pakistan had carried out the attack. India cried foul. Pakistan said these were people not under its control. The impact was felt on trade as well. Indian exports fell to $1.4 billion in 2008-09, though they recovered slightly to $1.6 billion in 2009-10. Pakistan’s exports to India have seesawed between $275 million and $370 million in the last few years.
A look at the disaggregated data shows that India exports man-made filaments, organic chemicals, cotton, animal fodder and vegetables to Pakistan and imports organic chemicals, fruit, salt and cotton. These are all commodities. The opportunity is missed by makers of consumer goods who know that the tastes and aspirations of people across the border are quite similar.
Business-to-business relations were meant to be the second track of diplomacy to normalise relations between the two nuclear-armed neighbours. Business would follow the political initiative, it wasn’t the primary mover. The import is clear. If the leadership of the two countries is on the same page, business will flourish; if not, it will languish. That’s what seems to be happening now.
The Federation of Indian Chambers of Commerce and Industry (Ficci) had in 2004 organised the first-ever Made in Pakistan exhibition in New Delhi. It was a huge success with over 40,000 footfalls. The exhibits brought by the Pakistanis were all sold out. When their food stalls ran out of grub, they bought it in the bylanes of old Delhi and sold it as authentic Pakistani cuisine at the exhibition! The next year, Ficci took a 105-strong delegation to Pakistan; it had also planned a Made in India show there, but it was called off at the last moment because of security concerns. This was a huge blow; several Indian companies had even booked warehouses to store their products! Still, a second Made in Pakistan exhibition was held in Delhi, which was no less successful than the first.
Things came to a standstill after that. The rise of the jehadis has been bad news for business. It has changed the nature of Pakistani politics. The leaders cannot be seen as soft towards India. There was even a proposal that Pakistan would sell 3,000 Mw of power to India at the Rajasthan border. But the plan was scuttled because that would have been seen as less of a commercial transaction and more of a political sellout to “empower” India. It’s going to be a long haul before Indians are welcomed with open arms there.
But there is hope that things could improve in the days to come. India has granted Pakistan the status of a most favoured nation; Pakistan, on its part, has expanded its “positive” list of items that can be imported from India. An Indian drug maker found vaccines on that list within hours of telling the Pakistani leadership that he could supply at a fraction of what western vaccine makers were charging!
Ficci had hosted a 40-member delegation from Pakistan in November, and is looking at the possibility of taking a high-powered delegation there sometime in March. The ministry of external affairs, it is learnt, looks favourably at this initiative, though the security issues are yet to be sorted out.
