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The Big Picture – Thaw in Indo-Pak relations?


The Indo Pakistan relations that has gone through many ups and downs over the decades and which has been more or less in the cold storage in the last six months is now seeing another thaw in the ties. The talk between the two heads of the country and the decision to send the foreign secretary to Pakistan next week is being seen as a sign of renewal of relations. After the India government cancelled the high level meeting in the August last year the relations had frozen virtually. The election result of J & K is also seen as a catalyst.

Pakistan agreed to grant MFN status to India, renaming it non-discriminatory market access (NDMA), in the first quarter of 2014, provided India gave market access to Pakistan for some of its items. Both countries have also decied to ease visa processes across the border and open banks on each side to accelerate transaction processes.

Meanwhile, trade between Pakistan and India has grown by a factor of seven, reporting at 2.3 billion dollars in 2013. Indian exports to Pakistan comprise 80 % of this bilateral trade. Many experts contend that trade between the two countries is actually almost double the official figure, with imports from India coming to Pakistan via third countries such as Dubai. MFN status would enable direct imports into Pakistan from India instead of indirect routes that translate into higher transport costs.

The policy of the new government has been to promote ties with all our neighbours. The government is keen to boost trade with Pakistan via land route. Pakistan has also recently given signals that it may grant non-discriminatory market access status to India. The two countries are moving towards sealing a deal to liberalise trade.