Pakistan-India Trade:

Recommendations

Info

Pakistan’s Trade with India: Thinking Strategically KeY issues To Be addressed Post-Liberalization Trade and Investment Volumes Gravity models predict that with the resumption of normal trade, the 2009 Pakistan-India trade volume of $2 billion could be 5 to 10 times larger. 4 However, gravity models do not adequately capture the complex relationship between Pakistan and India that would come into play with the resumption of normal trade. On the one hand, there is historical and cultural similarity and, on the other, there are grievances and grudges. Recently, the Pakistan Business Council’s (PBC) regional trade group (comprised of businessmen, academics, and civil servants) conducted a survey of perceptions within the group. The range of perceived trade flows following liberalization is reported in Table 3. 5 The longer term perceived impact (after about 10 years of liberalization) is significant. However, in order for trade flows to realize their full potential, investment flows must also be on the normalization agenda. An influx of investment will be good news for Pakistan, as it currently needs capital inflows to Table 3: Pakistan Business Council (regional Trade Group Members) Perceptions on likely Trade and investment flows following india-Pakistan liberalization Trade Volume Short-term $1–5 billion Medium-term $10–20 billion Long-term $15–50 billion | 41 | investment flows into Pakistan By Pakistanis By indians Substantial increase Sustained increase of more than $1 billion a year
Ijaz Nabi move to a higher growth trajectory. India, being right next door and with a large pool of savings, would be a promising source of investment. Threefourths of the PBC panelists agreed that investment flows by both Indians and Pakistanis, following trade liberalization, will increase in volume. Hence it is not only the Pakistani economy that would benefit from bilateral investment flows; India also stands to gain. As compared to their home country, Indian investors will find in Pakistan an environment much more conducive to economic activity (see Table 2). The assumption, of course, is that law and order in Pakistan will have improved significantly. Joint ventures of Pakistani and Indian investors can be visualized in the old trading centers of Peshawar, Lahore, and Sindh, taking advantage of plentiful Pakistani labor, lower transportation costs (from Peshawar to the Central Asian markets, and from Karachi and Gwadar to the Gulf and Middle East markets), and Pakistan’s extensive infrastructure along the North-South Corridor (linking Peshawar, Lahore, and Karachi). Tapping into India’s Knowledge Economy India is now reaping the benefit of shrewd investment in higher technical education and is positioning itself as a knowledge economy. This is best evidenced in its phenomenal success in the IT sector. India now figure 5: international Competitiveness of Manufactures exports High Technology Exports as % of Manufactured Exports 40 35 30 25 20 15 10 5 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 | 42 | 2002 2003 2004 2005 2006 India Pakistan China Indonesia Korea, Rep. Thailand
Page 1 and 2: Pakistan-India Trade: What Needs To
Page 3 and 4: This publication marks a collaborat
Page 5 and 6: Available from : Asia Program Woodr
Page 8 and 9: | vii | Contents The Pakistan-india
Page 10 and 11: The Pakistan-India Trade Relationsh
Page 28 and 29: Moving Toward Pakistan-India Trade
Page 40 and 41: Pakistan’s Trade with India: Thin
Page 56 and 57: BoX 2: The new (old) road to Kashmi
Page 62 and 63: Perspectives from India | 53 | ARVI
Page 64 and 65: Perspectives from India growth econ
Page 66 and 67: Perspectives from India Pakistan. T
Page 68 and 69: Managing India-Pakistan Trade Relat
Page 84 and 85: Additional Trade Challenges: Transp
Page 90 and 91: Product Code Additional Trade Chall
Page 100 and 101:
Additional Trade Challenges: Transp
Page 102 and 103:
Page 104 and 105:
Page 106 and 107:
What Can India and Pakistan Do To M
Page 108 and 109:
Page 110 and 111:
Page 112 and 113:
Page 114 and 115:
Page 116 and 117:
Page 118 and 119:
Page 120 and 121:
Page 122 and 123:
Page 124 and 125:
Page 126 and 127:
Non-Trade-Related Stakes of the Pak
Page 128 and 129:
Page 130 and 131:
Page 132 and 133:
Page 134 and 135:
Page 136 and 137:
Page 138 and 139:
Recent Asia Program Publications Pa
Page 140 and 141:
Recent Asia Program Publications Ch
Page 142 and 143:
Recent Asia Program Publications Th
Page 144 and 145:
Woodrow Wilson Center Pakistan Scho
show all

Pakistan-India Trade:

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?