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India-Pakistan trade much below than potential: Reports

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Islamabad| The current trade between India and Pakistan is at a little over USD 2 billion, much below than the potential, and can go up to USD 37 billion if the two countries tear down artificial barriers like lack of connectivity, trust deficit and complicated and non-transparent non-tariff measures, according to a World Bank report.
The report titled ‘Glass Half Full: Promise of Regional Trade in South Asia’ was released here on Wednesday.
Dawn reported that it says that the current trade between the two countries is much below than full potential. It could only be harnessed if both countries agree to tear down artificial barriers.The bank also estimated Pakistan’s potential trade with South Asia at USD 39.7bn against the actual current trade of USD 5.1bn.

The report also unpacks four of the critical barriers to effective integration. The four areas are tariff and para-tariff barriers to trade, complicated and non-transparent non-tariff measures, disproportionately high cost of trade, and trust deficit.Talking to a group of journalists on key points of the report at the World Bank office in Islamabad, lead economist and author of the document Sanjay Kathuria said it was his belief that trust promotes trade, and trade fosters trust, interdependency and constituencies for peace.In this context, he added, the opening of the Kartarpur Corridor by governments of Pakistan and India would help minimise trust deficit. He said such steps will boost trust between the two countries. For realising the trade potential between Pakistan and India, he suggested the two countries can start with specific products facilitation in the first phase.

Kathuria said Pakistan had least air connectivity with South Asian countries, especially India. Pakistan has only six weekly flights each with India and Afghanistan, 10 each with Sri Lanka and Bangladesh and only one with Nepal, but no flight with the Maldives and Bhutan. Compared to this, India has 147 weekly flights with Sri Lanka, followed by 67 with Bangladesh, 32 with the Maldives, 71 with Nepal, 22 with Afghanistan and 23 with Bhutan. The report recommends ending sensitive lists and para tariffs to enable real progress on the South Asia Free Trade Agreement (SAFTA) and calls for a multi-pronged effort to remove non-tariff barriers, focusing on information flows, procedures, and infrastructure. The report stated that Pakistan’s decision of not granting MFN status or non-discriminatory market access to India was also a barrier to trade.

The preferential access granted by Pakistan on 82.1% of tariff lines under Safta was partially blocked in the case of India because Pakistan maintained a negative list comprising 1,209 items that could not be imported from India, the report noted. Policy-makers may draw lessons from the India-Sri Lanka air service liberalisation experience. Connectivity is a key enabler for robust regional cooperation in South Asia.

Kathuria said that reducing policy barriers, such as eliminating the restrictions on trade at the Wagah-Attari border, or aiming for seamless, electronic data interchange at border crossings, will be major steps towards reducing the very high costs of trade between Pakistan and India. He argued that the costs of trade are much higher within South Asia compared to other regions. The average tariff in South Asia is more than double the world average. South Asian countries have greater trade barriers for imports from within the region than from the rest of the world.He said these countries impose high para tariffs, which are extra fees or taxes on top of tariffs. More than one-third of the intraregional trade falls under sensitive lists, which are goods that are not offered concessional tariffs under The World Bank Country Director for Pakistan, Illango Patchamuthu, said Pakistan is sitting on a huge trade potential that remains largely untapped. “A favorable trading regime that reduces the high costs and removes barriers can boost investment opportunities that are critically required for accelerating growth in the country,” he said.

The World Bank’s Director Macroeconomics, Trade and Investment Caroline Freund said Pakistan’s frequent use of tariffs to curb imports or protect local firms increases the prices of hundreds of consumer goods, such as eggs, paper and bicycles.They also raise the cost of production for firms, making it difficult for them to integrate in regional and global value chains, she said. “Pakistan needs to promote export promotion policies to ensure sustainable growth.”

On the issue of currency devaluation, she said undervalued currency is an anti-export measure. She suggests exchange rate should be determined by the real market trend.

India International

India’s negative attitude unhelpful in improving ties: Pakistan

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Islamabad | Accusing India of perpetuating “dynamic rivalry”, Pakistan Foreign Secretary Tehmina Janjua has said New Delhi’s negative attitude was not only unhelpful for improving bilateral ties but was also stopping South Asia from making progress and attaining peace.

Speaking at a conference on ‘Conflict and Cooperation in South Asia: Role of Major Powers’ hosted by the Islamabad Policy Research Institute (IPRI), Janjua said that India, by refusing to attend the South Asian Association for Regional Cooperation (SAARC) summit in Islamabad, was holding the regional body’s summit process hostage.

Referring to India’s approach on ties with Pakistan, Janjua said India was “spinning hatred” and perpetuating “dynamic rivalry”, according to Dawn newspaper. This, she maintained, “was not only unhelpful for improving Pakistan-India ties but was also stopping South Asia from making progress and attaining peace”.

India, which blames Pakistan for several terror attacks in the country, has firmly told Islamabad that terror and talks cannot go together. She regretted that India tried to drown in controversy of Pakistan’s gesture of agreeing to the Kartarpur Corridor, for facilitating Sikh pilgrimage to one of their holiest sites, due to its domestic politics, but Islamabad ignored the Indian negativity and decided to “stay the course”. We are convinced that we will continue to try for peace and stability in the region,” she said.

About the new Pakistan government’s policy on India, Janjua spoke of Prime Minister Imran Khan‘s first address to the nation after the July elections in which he had offered to take two steps for every single step that India would take for normalisation of ties with Pakistan.

She said Khan in his letter to his Indian counterpart Narendra Modi expressed willingness to discuss all issues that were part of the ‘Composite Dialogue’. “Unfortunately we haven’t seen the kind of reciprocation that was required,” she said.  The ties between India and Pakistan nose-dived in recent years with no bilateral talks taking place.

The ties strained after the terror attacks by Pakistan-based groups in 2016 and India’s surgical strikes inside Pakistan-occupied Kashmir. The sentencing of alleged Indian national Kulbhushan Jadhav to death by a military court in April over espionage charges last year further deteriorated bilateral ties.

The two sides often accuse each other of ceasefire violations along the Line of Control, resulting in civilian casualties. The foreign secretary also criticised India for “spending massively on force modernisation” and questioned the support being extended to it by the world powers in its acquisition of weapons.

“Recently held India-US 2+2 dialogue provides India access to advanced and sensitive US military hardware, technology, and weaponry,” she said.  She also took a jab at Russia for signing a deal with India for providing it advanced S-400 air defence systems. “This would undermine the delicate strategic balance in the region and beyond,” she said.

Reiterating Pakistan’s position on the Indian arms build-up, she said: “Pakistan is concerned that such an arms race will be detrimental to peace and stability of the region. Pakistan doesn’t subscribe to any nuclear or conventional arms race in the region.”

Janjua said Pakistan would continue to pursue its policy of “credible minimum deterrence” to maintain strategic stability and cater for its interests. Contending that Pakistan’s foreign policy has been successful, the foreign secretary said it was proven by the country’s counterterrorism operations, the progress achieved by the China-Pakistan Economic Corridor and the emerging consensus on seeking a peaceful resolution of the Afghan conflict.

“Our view point on Afghanistan on the futility of kinetic approaches and merit of pursuing Afghan-owned and Afghan-led reconciliation process is finding greater traction today than ever before,” she underscored.

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India International

India-Myanmar friendship driven by quest for mutual peace: President Kovind

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Nay Pyi Taw | The friendship between India and Myanmar is not driven by short-term goals, but by a lasting quest for mutual peace and prosperity, President Ram Nath Kovind has said as he extended New Delhi‘s support for preserving the unity and territorial integrity of the neighbouring country.

Speaking at the State Banquet hosted by his Myanmarese counterpart U Win Myint on Tuesday, Kovind stressed that India’s partnership with Myanmar is at the important intersection between friendship, neighbourhood and shared core interests. He appreciated Win Myint, First Lady Daw Cho Cho and State Counsellor Daw Aung San Suu Kyi for the generosity and hospitality accorded to him, the Ministry of External Affairs said in a statement.

“Because our destinies are inter-twined and inter-linked, our friendship is driven not by short-term goals, but by a larger and lasting quest for mutual peace, progress, and prosperity,” Kovind, who became the first state guest after Win Myint assumed office as the President of Myanmar, said.

He said both the sides are working tirelessly to enhance the intensity of the bilateral engagement through increased connectivity, capacity-building and growing commercial and cultural exchanges. “We are aware of the challenges Myanmar faces in taking forward the peace process, national reconciliation, and economic recovery.

“The government and people of India stand by you. We are in full support of your peace process and in preserving the unity and territorial integrity of Myanmar, all of which are fundamentally in our own interests as well,” Kovind said, adding without that, India cannot succeed in its effort to bring development, prosperity, and connectivity to its citizens in the Northeast, which borders Myanmar.

He said that the two countries are bound together by shared waters, forests and hills, by culture, cuisine, language, and history. “And more profoundly, by the blessings of Lord Buddha. These are the bedrock of our relationship, which provides it strength and a unique emotional connect,” he said. The vibrant Indian-origin community, which has made Myanmar their home, is an organic link between the two countries, the president said.

“Our anti-colonial struggles and our shared aspirations bring us together as well. We gave a home to each other when force and fate defeated us. King Thibaw spent his days in Ratnagiri and Emperor Bahadur Shah Zafar in Yangon. We have, indeed, been friends in prosperity and as much in adversity,” Kovind said.

The propagation of vipassana, a meditation technique developed and practiced by Lord Buddha, owes so much to the pioneering work of Satya Narayan Goenka, who received his initial lessons from Sayagyi U Ba Khin, he said.

“We fondly remember Daw Tint Tint, or Usha Narayanan, the daughter of Myanmar, who became the First Lady of India,” Kovind said.

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India International

Stark difference in Indo-US ties since 1998 nuclear tests: Indian envoy

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Washington | There is a stark difference in India’s relationship with the US since the 1998 nuclear tests and bilateral ties are now very good, the outgoing Indian envoy here has said. Navtej Singh Sarna, India’s Ambassador to the US since November 2016, is retiring later this month after an illustrious career spanning 38 years.

In his previous stint in the US from September 1998 to June 2002, Sarna served as the minister/counselor at the Indian Embassy in Washington DC. During that time India was slapped with US sanctions in the aftermath of the nuclear tests.

“Well, it’s night and day, if I can say that,” Sarna said in response to a question when asked about the difference in the India-US relationship in the past 20 years.  After the nuclear tests, he said though the country was slapped with sanctions, there was new respect and understanding for India.

“There was a new understanding of India’s potential as an economy. There was a new understanding of India’s power as an IT, particularly around Y2K, when suddenly Indians were the ones who were sorting out major problems. And there was an understanding that India had to do its nuclear tests because it lived in a tough neighbourhood,” he said.

Sarna said the visit of the Prime Minister Narendra Modi to the US last year gave tremendous impetus to the bilateral relationship. Describing Modi’s visit to US as the highlight of his ambassadorship, Sarna said the visit was a tremendous success.

“Today, I think the relationship is in a very good place,” he told the select audience.  Referring to the recent visit of Defence Minister Nirmala Sitharaman, Sarna said India-US defence relationship has strengthened under the Trump administration.

Early this year, he pointed out, the US renamed one of its commands as US IndoPacific Command. India was given STA-1 Status, he said adding that this is the long run, perhaps may be a hugely significant step. It is very satisfying that India is the only non-NATO country in that category to date.

India was given the Strategic Trade Authorisation-1 (STA-1) status in August, paving the way for high-technology product sales to the country, particularly in civil space and defence sectors.

In his remarks, Sarna urged the business community, one of the prime drivers of the relationship, to create and sustain good feelings about India across the United States. Sarna also served as the longest-serving spokesperson of the Ministry of External Affairs and country’s Ambassador to the United Kingdom and Israel.

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