Amritsar: India and Pakistan have improved their relationship but trade between both countries is yet to boom.
India granted Pakistan most favoured nation (MFN) status when P V Narasimha Rao was prime minister.
Pakistan recently increased the number of commodities in the positive import list from India from 750 to 1059, but it is still hasn't granted its neighbour MFN status.
Trade specialists say Pakistan fears India’s trading power.
"Pakistan fears Indian goods might swamp its local industry if it grants MFN status to India," said Chairman, Confederation of Indian Industry, Amritsar zonal council, Gunbir Singh.
"But the citizens of Pakistan will be the ultimate benefactors if India is given MFN status," he added.
Pakistan allows Indian goods, worth billions of rupees, to be smuggled or imported from Singapore and Dubai with a disadvantage of higher freight and time.
But it won't allow direct and open imports. Indian goods take more than two months to reach Pakistani ports.
Wagah is a shorter and less expensive trade route but Pakistan isn’t willing to use that.
President, Indo Foreign Chamber of Commerce, B K Bajaj, said Pakistan leadership doesn’t have the political will to grant India MFN status.
Bajaj added India, during the last financial year had a closed trade figure of nearly one billion rupees and the figure could multiply ten times if Pakistan granted it MFN status.
It was also reported that despite the large increase in the list of "positive items", bilateral trade between India and Pakistan continues to be small, at less than one billion dollars.
Currently, Pakistan has an adverse balance of trade of $259 million. The total volume of trade between the two countries in 2004-2005 was $835 million, an increase from $436 million a year earlier.
Pakistan’s export to India in 2004-05 was worth $288 million and its imports from India were $547 million. State Bank of Pakistan estimates that the immediate potential of exports to India was about $1.8 billion.
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