FPCCI CHIEF SAYS

India, as a big brother, should extend generous help to enhance bilateral trade

IN  historical perspective, "it is true that without resolving Kashmir Issue" the Indo-Pak trade relations can not move forward in the right direction", so feels Mr. Riaz Ahmed Tata, President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) who sees "tremendous potential in bilateral trade if the Kashmir issue is settled affably". In an interview with Amitabha Sen, the FPCCI chief underpinned  the need for establishing "politically independent trade relations" and said the Federation is closely working with the government pursuing to eliminate all the trade barriers, which have occurred as a result of political conflict. India being the biggest and most influential county in The South Asian Region can play pivotal role in removing all the political and economic barriers". Commenting on the role of India, Mr. Tata said as a "big brother", India should extend "generous help by ignoring tiny issues and facilitate business activities. This may increase CBM levels. There should be no closure of Trade Routes on Political grounds". He also urged to the Indian federal government to hold composite dialogue on Kashmir issues which once solved would automatically put end mark to all other conflicts"

AS: In the backdrop of current ‘feel-good’ bilateral scenario, how do you rate the prospect of the Indo-Pak bilateral trade relations?

Mr. Tata: After the normalization of political relations between Pakistan and India, the prospects for trade ties are brighter enough to enhance bilateral trade manifold. The settlement of political issues will positively effect our trade relations and enormous potential, which so far has not been capitalized, could be exploited in prolific manner. I foresee tremendous potential in mutual trade. Resumption of Trade relations would open our respective Markets for goods and services, which at present are being traded by other Countries. I am of the opinion that trade could be a tool to better our political relations if the Governments of both countries make earnest endeavours to keep trade aloof from Political Scenario.

AS: Revival of the hope for an amicable resolution of issues that have been stumbling the Indo-Pak relationship so long seems to have prompted business and industry on both sides of the border to take fresh initiatives. How this momentum could be kept up? Do you think that this momentum is an impulsive one and not based on strong logics?

Mr. Tata: The recent development towards the improvement in Indo-Pakistan relations is a welcome initiative for the promotion of Business activities between our two Countries. I wish this development be transformed into profound and longstanding relations. As for as question of keeping up present momentum by Business Community of both sides is concerned, I perceive that the Entrepreneurs of India and Pakistan can play important role by lobbying and exerting their influence on the respective Governments to reconcile that in the Era of Globalization there is no room for political-oriented trade barriers. We should learn lesson from China and Taiwan, which despite having Political difference never hindered their Trade relations.

AS: The President of Pakistan, General Pervez Musharraf, has made it abundantly clear that ‘Kashmir’ is the central issue and resolution of this issue alone can widen the scope of stronger bilateral relations in almost every field including business and trade. Placed with such a statement from the Head of the country, how would you like to see the future of Indo-Pak bilateral trade prospect?

Mr. Tata: Statement of General Pervez Musharraf speaks the degree of sensitiveness of the issue on which both the countries have adopted aggressive approach in the past. I put up you this same question to you and probably you will also reply with fair mind that until unless we don’t settle this core issues on mutually accepted grounds, long-lasting trade relations cannot be established. In the context of historical perspective, it is true that without resolving Kashmir Issue we can move forward in the right direction. As mentioned earlier business Community in Pakistan and India is eagerly waiting for establishing profound trade relations, which highlights its point of view. I see tremendous potential in bilateral trade if the Kashmir issue is settled affably.

AS: FPCCI has a very crucial role to play in strengthening the bilateral trade relations with India. What is your strategy to give it a concrete shape? How FPCCI can help the government in smoothening out rough edges of an otherwise highly potential trade prospect with the neighbouring country?

Mr. Tata: FPCCI attaches great importance doing trade with India. It was the FPCCI that sent its Delegation to India just after the process of recent development towards the normalization of relations between India and Pakistan initiated. The formation of Indo-Pak Chambers of Commerce was a sincere effort towards the establishment of better trade ties between our two Countries. For last one-year four trade delegations have visited India under the aegis of FPCCI. We are closely working with the Government pursuing to eliminate all the trade barriers, which have occurred as a result of political conflict. We are well aware that the important importable items, which we are buying from farthest destinations, are available in Indian Markets at competitive Price and similarly Indian Markets are waiting Quality goods from Pakistan. We have time and again emphasized for establishing politically independent trade relations.

AS: Some amount of momentum in the trade relations- visits and counter visits by trade and industry delegations from both the countries- are visible after the SAARC summit early this year in Islamabad. How you as FPCCI chief plan to keep up this momentum?

Mr. Tata: Recently held "Made in Pakistan" Exhibition at Delhi under the aegis of FPCCI could be regarded as a result of our willingness to establish ideal trade relations with Counterparts in India. In the context of SAARC Summit, FPCCI has planned to send trade delegations on frequent basis. We are also planning another Exhibition soon in Mumbai. This summit has really opened a fresh vista to explore trade opportunities for both India and Pakistan and we are seriously trying to capitalize this development in the best interest of bilateral trade and Economic relations.

AS: Compared with the potential (anything between US$ 1.5-2 billion), the Indo-Pak trade is currently hovering around US$ 230-250 million. Can you suggest measures to boost up the figure without compromising the basic econo-political issues of both the countries?

Mr. Tata: I agree that the Trade balance, which is currently stagnant to 250-300 million dollar mark, is very much lower as compared to the enormous potential available but at the same time volume of illegal trade worth $1.50 to 2 billion is reflective that there is no lacking of potential but it is the political scenario which has hindered trade relation of our two countries. You are already aware that Socio-economic Indicators in India and Pakistan in general and in the South Asian Region are lower than other developing trade bloc. We are facing rampant poverty and unemployment problems. Our 50% population has been living under poverty line, 80% does not have direct access to clean drinking water and education level is also at the lower ebb. For the sake of humanity both the Governments of India and Pakistan will have to redefine their foreign and trade policies. By promoting trade and economic cooperation we can easily overcome these challenges.

As far as the prospect for trade relations between two countries is concerned, FPCCI earnestly desire to promote business through frequent exchange of business delegations on reciprocal basis and holding of Trade exhibitions. We should also compliment each other’s economies and preferably promote trade. I would also recommend establishing Joint Ventures in the areas mutually profitable.

AS: If asked, what would be FPCCI expecting from the federal government of India to enhance trade between the countries?

Mr. Tata: I am of the firm opinion that India being the biggest and most influential County in The South Asian Region can play pivotal role in removing all the political and Economic barriers. India as a big brother should extend generous help by ignoring tiny issues and facilitate business activities. This may increase CBM levels. There should be no closure of Trade Routes on Political grounds. We also request Federal Government to hold composite dialogue on Kashmir issues which once solved would automatically put end mark to all other conflicts. Confidence Building measures should be transformed into the full and final settlement.

AS: An obvious reference in this respect is related to India’s MFN status. This is a very crucial issue not only for India but for trade and industry in Pakistan too. India has opened its door wide to the extent of having ‘Made in Pakistan’ exhibition in Delhi recently. What is FPCCI’s stand on MFN issue?

Mr. Tata: FPCCI appreciates the grant of MFN Status to Pakistan from India and desires that Pakistan should also grant the same status to India so that business Community of India could also enjoy the concessions under MFN Status. FPCCI will welcome every Indian delegation, which desires to hold Exhibitions in Pakistan. FPCCI is eager to facilitate such activities and our participants of "Made in Pakistan" have already extended a wishful request to Counterparts in India to hold similar exhibition in Pakistan. Granting MFN status is a Government job, business community can also exert its influence, which we are doing seriously. It would be largely beneficial for promotion of Trade if MFN Status were granted to India. I think this issue will automatically resolve once the SAFTA becomes operational but we are requesting Government to do it as early as possible. We also request that incentives given to Indian Industrialist and Agriculturists should be brought at par with Pakistan, it would lead to the competitive environment enable us to increase our share in mutual trade.

AS: One of the major areas of Indo-Pak collaboration could be Information Technology? What is scope of Indian IT companies doing business there and also of helping Pak IT industry grow stronger there?

Mr. Tata: Information technology (IT) has assumed unprecedented importance in the global economic arena. In Pakistan, the present Government is according a very high priority to this sector. The government, as the main facilitator, enabler, and promoter of the IT sector, has evolved an effective national IT Policy and Action Plan that clearly caters to the needs of nurturing the industry and is responsive to the dynamic forces of change that can affect its future growth. The Private sector is being brought into the mainstream as the main driver for growth. It has created huge potential for Private Sector. India having wider software Industry can extend help to Pakistan to promote IT through the establishment of Joint Ventures. I see huge scope for Indian Companies in this sector.

AS: While talking about Indo-Pak trade relations, an obvious reference comes and that of the role of SAARC. The two major nations- India and Pakistan- are in a complex situation. On the other hand SAFTA is being proposed to be implemented by 2006. How you can strike a balance between the two? What role FPCCI can play in this respect and what FPCCI expects of Indian trade bodies in this respect?

Mr. Tata: SAARC is the only platform, which has provided the leaders of both countries dozens of opportunities to negotiate and resolve all issues. The so far failure of SAARC is mainly due to the inclination of India on this bloc while Pakistan has been the fervent supporter to make this bloc as the dynamic institution for the uplift of our societies. You may agree that in the era of Globalization, regional trade blocs have become effective platforms to promote intra-regional trade. The World Trade Statistics reveal that regional trade within NAFTA (67%), EU (62%), ASEAN (26%) and Even COMESA (22%) have effectively promoted intra-regional Trade while the intra-regional trade within SARRC regions is poorly less than 5%. If we want to promote bilateral trade through intra-regional trade we will have to make SAARC an effective medium.

SAFTA is a future document for South Asian Nation and it is wrapped with enormous potential to boost trade between Pakistan and India. Pakistan is ready to bring down tariffs, India should also reduce import tariff preferably before the 2006. It may help increasing the present volume of trade.FPCCI desires the implementation of this document in true spirits and hope that it would increase volume of bilateral trade up to $ 3 billion to 4 billion per annum.

AS: Do you think that slower growth of SAARC means greater opportunities for other regional trade bodies and concerned industrialized countries to get a strong and dominating hold on the SAARC market? How to pre-empt such a situation?

Mr. Tata: India and Pakistan being the major players can make this bloc an effective medium to promote trade in the region. We can use this common platform to institutionalize and further promote our trade. A joint SAARC Markets will have multifarious impacts and would act as a Joint force from where we could be able to face all the challenges of upcoming regime of Globalization.

May 6, 2004