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July 16, 2001
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Money > Business Headlines > Report July 16, 2001 |
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The ups and downs of Indo-Pakistan tradeIndo-Asian News Service Like the mood swings at the India-Pakistan summit in Agra, trade between the two countries has swung widely, from virtual free movement of goods across the border after 1947 to the war years when there was almost no business. In the early years, goods and traders moved across freely between the two countries. India imported raw jute, raw cotton and foodgrains while Pakistan bought coal, textiles, sugar, matches, jute goods and iron and steel. In 1948-49, bilateral trade totaled Rs 1.84 billion. But as the first war between the two countries broke out over Kashmir, trade began to fall. By 1950-51, when the era of planning started in India, it had fallen to Rs 870 million. This constituted just about 6 per cent of India's global trade. This went up again in 1951-52 to Rs 1.3 billion, but dropped dramatically the next year to Rs 527 million, slipped to Rs 136 milion in 1958 and then to Rs 105 million in 1965-66, when the second war was fought. There was negligible trade for almost a decade until 1975, when bilateral trade stood at Rs 229 million. It fell to Rs 107 million in 1976-77. This kept rising until 1980-81, slipped again to Rs 286 million in 1984-85. It rose again, hitting Rs 5.2 billion in 1992-93, soon after India opened up its economy. Despite Indian accusations of Pakistan's supporting terrorism in Kashmir, two-way trade kept growing during the 1990s, standing at Rs 13.5 billion. The figure for 1999-2000, the last year for which figures are available, was Rs 7 billion. The main items of Indian exports are tea, spices, oil meals, fruit and vegetable seeds, iron ore, drugs and pharmaceuticals, dyes and intermediaries, and paper and wood products. India's main imports were fruits and nuts, organic and inorganic chemicals, textile yarn, fabrics, sugar and leather. According to Indian officials, Pakistan has allowed the import of only 600 items from India. While New Delhi has liberalized the visa regime, and business visitors from Pakistan are exempted from reporting to the police, Pakistan has not reciprocated the gesture. In the process, smuggling and "third country trade" - by which imports are made through a third country - is much more than bilateral trade. Pakistan insists that there can be no progress in boosting bilateral trade until the Kashmir problem is resolved. Pakistani and Indian officials discussed trade issues only briefly during the summit talks between President Pervez Musharraf and Prime Minister Atal Bihari Vajpayee. Though Vajpayee had included his finance and commerce ministers in his delegation in the hope that all issues would be discussed, Musharraf remained true to his word and said trade and other confidence-building measures could be discussed only 'in tandem' with recognition of Kashmir as a dispute between the countries. YOU MAY ALSO WANT TO READ:
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