Pakistan-India Trade:

The Pakistan-India Trade Relationship: Prospects, Profits, and Pitfalls
countries; and improving infrastructure at border crossings. Despite
recent upgrades at the Attari/Wagah border, the need for x-ray machines,
better warehousing, and testing laboratories remains strong.
So long as direct routes are marred by such inefficiencies, traders
will have little incentive to abandon the longer, more circuitous
routes they have patronized for decades.
5. Establish new oversight institutions. A bilateral commission
should be set up to oversee the Pakistan-India economic relationship,
with a focus on addressing non-tariff barriers; opening up
more land routes for trade; and promoting more cross-border travel.
A regional trade forum (comprising members of the private sector,
academia, and the media) should be formed to monitor this
bilateral commission. To accommodate inevitable disagreements, a
dispute resolution/grievance redressal mechanism should be established
as well. It should be operated not by the two governments,
but by a private sector consortium incorporating the Confederation
of Indian Industries, Federation of Indian Chambers of Commerce
and Industry, Pakistan Business Council, and Federation of Pakistan
Chambers of Commerce and Industry.
6. Use bilateral trade normalization as a springboard for
South Asia-wide trade normalization. Tighter Pakistan-India
trade links—lubricated by more integrated and efficient transport
networks and more open transit and visa arrangements—can raise
the entire region’s trade prospects. Pakistan’s extension of MFN
status to India puts Pakistan and India on a more equal footing
within the South Asia Association of Regional Cooperation, and
provides impetus to activate the long-moribund South Asian Free
Trade Agreement (SAFTA).
7. Remain committed to the Composite Dialogue process. If
this negotiating process is sidelined, critics of trade normalization
in Pakistan would be emboldened, because they could argue that
Pakistan’s principled positions on political and territorial issues have
been sacrificed for purely material gain. Such critics could also assert
that more trade does nothing to resolve these core issues.
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