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25 Mar, 2024 13:40

Pakistan to consider restoring trade with India – top diplomat

Foreign minister has signaled Islamabad could be willing to revitalize business ties with New Delhi, in deep-freeze since 2019
Pakistan to consider restoring trade with India – top diplomat

Pakistan will “seriously examine” restarting trade ties with India, acting on sentiments expressed by its business community, according to the newly appointed Foreign Minister Muhammad Ishaq Dar. Diplomatic ties between the two nuclear-armed neighbors have remained in deep freeze, with little sign of a potential warm-up. On Sunday, New Delhi accused Islamabad of being a sponsor of terrorism at “almost an industry level.”

Dar, who took office earlier this month, after Shehbaz Sharif became Pakistan’s new prime minister following months of political turmoil, was responding to questions at a media briefing in London. The senior diplomat noted that, despite what he described as New Delhi’s “very painful” move in 2019 to change the status of Kashmir, a Muslim-majority region claimed by Islamabad, businesses in the country want to see trade relations with India restored.

“I think the business community of Pakistan is very keen [to restart trade]. When I presented the budget as Finance Minister last year, businessmen pointed out that the imports [from India] are coming in even today – they come via Dubai or via Singapore and involve higher freight, trans-shipment and other transportation costs,” the minister was quoted by Indian media as saying. He added that the government will invite stakeholders to discuss what can be done in terms reviving trade relations with India. 

In 2019, after a deadly attack in Kashmir in which 40 Central Reserve Police Force (CRPF) personnel were killed, India withdrew the status of Most Favoured Nation (MFN) it had earlier granted to Pakistan, and also raised import tariffs. Later the same year, Pakistan, following Prime Minister Narendra Modi’s government's decision to abolish Article 370 of India’s constitution, which had granted a degree of autonomy to Kashmir, suspended direct trade ties with India. 

Foreign Minister Dar’s statement was followed on Sunday by remarks from his Indian counterpart, External Affairs Minister S Jaishankar, noting that any talks with Pakistan would need to “face up to the problem” of its supposed attitude towards terrorist groups.

Speaking in Singapore, Jaishankar said: “Every country wants a stable neighborhood...if nothing else, you want at least a quiet neighborhood.” He added, however: “How do you deal with a neighbor who does not hide the fact that they use terrorism as an instrument of statecraft?” “It’s not a one-off happening,” he continued, “but very sustained, almost at an industry level.”

Jaishankar cautioned that “dodging the [terrorism] problem gets us nowhere” and vowed that New Delhi “will not skirt this problem anymore.”

Last year, a parliamentary panel in India urged the Modi-led government to consider reviving economic ties with Pakistan. The report, tabled in Parliament in July, noted the need to “consider the establishment of economic ties with Pakistan if they come forward and work towards broader people-to-people contacts in view of the cultural commonalities and civilizational linkages between our two countries.” The document was drafted by a parliamentary standing committee on external affairs, consisting of 31 members from diverse political parties.

The latest data shows that, despite the frosty ties, India-Pakistan trade stood at $1.35 billion in the period between April and December 2022, up from $516 million in all of 2021. Before bilateral trade was officially suspended in 2019, India’s exports to Pakistan stood at $2.06 billion, while imports were valued at $490 million.

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