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India, Pakistan businessmen moot safe trade pact

Indian and Pakistani business leaders on Monday sought to banish the ghosts plaguing trade between the neighbours and called for an investment promotion and protection treaty ahead of the summit this weekend.

They said they hoped the July 14-16 summit between Indian Prime Minister Atal Bihari Vajpayee and Pakistan President General Pervez Musharraf would reduce political tensions between the nuclear-armed rivals and help smoother trade.

"We feel there is increasing desire on the part of businesses of the two countries to strengthen economic co-operation," said MKSanghi, president-elect of the Indian unit of the International Chambers of Commerce.

"An investment promotion and protection treaty between our two governments would go a long way in facilitating greater bilateral investment linkages," Sanghi told a meeting of Indian and Pakistani ICC members in the Indian capital.

Sanghi said businessmen in both countries -- which have fought three wars since independence from Britain 54 years ago -- felt the need for such a treaty as transactions were exposed to political and security risks.

Industry officials estimate two-way trade has the potential to hit $5 billion annually, up from the current $200 million. Unofficial trade, smuggled or routed through third countries, is put at $1 billion annually.

This weekend's summit is expected to largely focus over the disputed Himalayan territory of Kashmir with little attention to trade. But ICC members of the two countries said a thaw in relations would boost trade.

They said steps such as removal of tariffs and trade restrictions, simpler visa rules in both countries, opening of land transport routes, direct sea routes and launch of India-Pakistan joint business ventures would go a long way in promoting higher trade.

"We are all hoping that this summit will bring about some change," said Ashraf Mohammed Ali, a senior official with Pakistan's Al-Ajam Group.

"We know India and Pakistan have bigger issues to resolve and we hope these will be sorted out at this summit, if not entirely at least partially," Ali said.

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