Published Date: Mar 31, 2013
Pakistani Investment Potential in India around USD 2.5 Billion: Experts
on India-Pakistan trade and investment cooperation, the expert at a meeting
called for expanding cooperation from ‘goods’ to ‘services’ and building
capacity of public departments to facilitate the trade between two countries.
were speaking at a multi-stakeholders meeting hosted by Sustainable Development
Policy Institute to discuss the progress on India-Pakistan trade cooperation
and opportunities after India allowed Pakistani investments in the country.
of stakeholders meeting included Dr. Mohsin Khan, Former Director IMF, Dr.
Vaqar Ahmed, Deputy Executive Director, SDPI, Dr. Ijaz Nabi from International
Growth Centre, Dr. Turab Hussain from LUMS, Dr. Tariq Bucha, President,
Pakistan Farmers Associate along with the representatives from All Pakistan
Textile Mills Association (APTMA), Punjab Board of Investment, Pharma Health
Pakistan and Sayyed Engineers (pvt) Limited.
his deliberations, Dr. Vaqar Ahmed presented the findings of SDPI studies that
explain informal trade between India and Pakistan, sector-specific non-tariff
barriers and potential of FDI in India by Pakistani investors.
informed that despite non-tariff barriers, the value of Indian goods entering
Pakistan through informal channels was observed around USD 4.2 billion
annually. He said, this implies that consumers see a wide gain from trade with
India which is driving growth in informal channels.
studies also reveal that potential of Pakistani investment in India is
estimated around USD 2.5 billion annually where the key sectors of interest for
Pakistani investors include textile, food processing, cement and auto sector.
In services sector, potential areas for Pakistani businessmen include banking,
insurance and hotel/restaurant related activities.
discussion, participants were agreed on granting MFN status to India, However
they also called for guarding some sectors through duties where India is giving
abnormally high subsidies to its producers.
were also of the view that, the
cooperation must now go beyond ‘goods’ to ‘services’. “Both countries should
enter into advanced negotiations on trade in services where issue of visa and
double taxation needs to be addressed. Moreover, the trade in energy must also
be looked at where short term emphasis must be on power sector cooperation,
whereas the long-term collaboration must target gas sector,” they added.
participants also noted that capacity of government institutions dealing with
trade diplomacy needs to be improved. There is weak capacity at Ministry of
Commerce with regards to analysis of disaggregated comparative advantages.
Similarly, Ministry of Industries needs to improve on advanced analysis on
product standards; National Tariff Commission needs to improve on safeguards
and dispute resolution and Ministry of Foreign Affairs needs improvement in
coordination with above mentioned ministries and their efforts. Further, with
the opening up of investment in India for Pakistani investors, Board of
Investment needs to take leading role in providing guidance on vertical and
horizontal supply chain linkages that can be formed between the two countries.