India-Pakistan Trade: Perspectives from the Automobile Sector of Pakistan

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India-Pakistan Trade: Perspectives from the Automobile Sector of Pakistan

Team Members: Samavia batool, Dr Vaqar Ahmed

Year: 2014-2015

Trade agenda is again on the forefront, and with track-I and track-II meetings forging, it is time to revisit the idea to grant MFN status to India. However, this decision needs to be taken keeping in view the sectoral paradigm.

Funded by ICRIER (http://www.icrier.org/), this study has been conducted to particularly focus on the automobile trade between India and Pakistan. The fact that Pakistan needs to enhance its export base especially in automobiles, geographic proximity with one of the largest auto manufacturer (commercial cars) serves as a motivation to explore the possibility of enhancing India-Pakistan automobile trade.

Some of the key objectives of this research are:

To analyze the competitiveness of the auto-industry across borders
To explore automobile import and export patterns of India and Pakistan with particular focus on bilateral trade in automobiles
To identify various hindrances in the way of cross-border trade enhancement in automobiles
To check whether India and Pakistan can be potential import partners in automobiles

Activities: Secondary data analysis and key informant interviews

Findings: Pakistan has a comparative advantage in several auto sector components/classifications. However, these do not find their way to India due to what the industry describes as non-tariff barriers, state-specific levies and unconventional environmental standards required by Indian authorities. This paper proposes a way forward whereby the commerce ministries of India and Pakistan can address the concerns of Pakistan’s auto sector and create a win-win milieu.