Gulf Daily News, Bahrain
Delhi upbeat on FTA with Islamabad
1 April 2005
PORT LOUIS: India said yesterday it hoped free trade with its neighbour Pakistan would happen within one to two years, as their sluggish peace process moves forward.
Trade is on course to rise more than 150 per cent in the financial year which ended in March to about $500 million, but businessmen predict it could reach $10 billion within five years of signing a free trade agreement.
Since the two countries stepped back in 2002 from the brink of what would have been their fourth war since independence, ties have warmed, but trade between the two countries has remained elusive. "We can see trade between India and Pakistan happening in the foreseeable future," Sanjaya Baru, spokesman for the Indian Prime Minister Manmohan Singh said.
"I don’t see why it can’t happen in the next year or two", said Baru, who is accompanying Singh on a visit to Mauritius. Barriers to commerce cemented by more than a half-century of hostility mean companies selling everything from wheat to tyres to Pakistan are forced to make costly detours into countries like Afghanistan and the UAE.
These indirect shipments are estimated to be at least six times greater than cross-border trade.
Businessmen say India could buy cotton yarn, vegetables and sports goods from Pakistan and sell everything from tea to steel in return. But Pakistan, whose $66m worth of exports to India in the eight months to November were dwarfed by imports of $315m.