Itís Delhiís move

Don't let bureaucracy or politics of reciprocity hold back trade with Pakistan

In a significant step towards better India-Pakistan bilateral economic relations, Pakistan is expected to operationalise the Most Favoured Nation (MFN) status to India in the next few weeks. Under this regime, Pakistan will give trade treatment to India at par with other nations, which will allow more Indian goods to be imported into Pakistan. India took the lead in giving Pakistan MFN status in 1996. India should similarly take the lead in further increasing trade in goods and services, and in the flow of capital from Pakistan.

Prime Minister Manmohan Singh initiated unilateral trade liberalisation in India in 1991. In his current tenure, he has worked towards improving the India-Pakistan relationship, despite the many conflicts that obstruct peace in the region. Combining the two elements ó unilateral trade liberalisation and the objective of improved relations with Pakistan ó is the next step. Instead of being held back by the bureaucracy and the politics of reciprocity in trade agreements, India must move first. India is the larger economy, and the prime minister understands the gains from trade liberalisation and from better relations with Pakistan.

The need to increase economic cooperation between the two countries as a means to build stakes in peace was reiterated in the recent Track II dialogue at the Chaophraya initiative, a forum of interaction for academics, parliamentarians and media of both countries. The need for building economic bilateral relations was emphasised, even as security issues create a trust deficit in other areas. Trade and investment across the border will help create lobbies and interest groups that would engage with each other, and put pressure on both governments to improve political relations and work towards solving other more difficult questions on Kashmir, terrorism, Afghanistan and nuclear security.

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