Pakistan's exports to India too low for MFN withdrawal to hurt

[Imran Khan]

Pakistan's exports to India too low for MFN withdrawal to hurt
Some impact to be felt in cement market in north India

By Jayanta Roy Chowdhury and R. Suryamurthy in New Delhi

• Published 16.02.19, 4:43 AM
• Updated 16.02.19, 10:16 AM

• 2 mins read

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Vigil outside the Pakistan High Commission in New Delhi as security was tightened following anti-Pakistan protests in the capital after the Pulwama terror attack. PTI
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India’s decision on Friday to withdraw the “most favoured nation” status from Pakistan is unlikely to cause any major tremors in either country as the total trade between the hostile neighbours had stood at just $2.4 billion in 2017-18, accounting for a mere 0.31 per cent of India’s total trade with the world and just about 3.2 per cent of Pakistan’s global trade.

India’s grant of MFN status to Pakistan in 1996 simply allowed Pakistani exporters to sell to India on the same terms as all other signatories of the World Trade Organisation. It did not give the neighbour any preferential treatment.

“The withdrawal today is a strong signal but also a symbolic one as the two nations don’t really trade with each other much,” said Prof. Biswajit Dhar of the Centre for Economic Studies and Planning, Jawaharlal Nehru University.

“Usually once granted, an MFN status is not withdrawn, that is why we say it’s a strong signal… but India can always say this is a reciprocal step since Pakistan never returned the favour to us.”

All WTO signatories are duty-bound to give other signatory nations equal treatment while levying import duty or allowing entry of goods, under the MFN norm.

Despite signing the WTO agreement, Pakistan has for two-and-a-half decades dithered on granting India MFN status, partly because local industry protested fearing loss of their market.

But observers say it was also because the literal translation of most-favoured nation into Urdu as “sabse pasandida mulk” gave ordinary Pakistanis the impression that this was a major giveaway to India.

Consequently, Pakistan maintains a negative list of 1,209 products that cannot be imported from India. It also imposes high tariff on those goods and services that are allowed entry. Banned goods from India include textiles, garments, pharmaceuticals, plastic and polymer, cars, trucks and auto parts.

Still, the total trade between the neighbours increased by 6 per cent in 2017-18 to $2.4 billion, with India selling $1.9 billion worth of goods to its neighbour and Pakistan selling about $500 million worth of goods to India. Trade through third countries — usually the UAE and Singapore — is estimated to be worth about another $5-10 billion.

“The revoking of the MFN status in trade terms will have a marginal impact as the volume of trade is very low. For Pakistan, the quantum of export to India is just 1.5 per cent of its total exports to the world,” Prof Nisha Taneja of the Indian Council for Research on International Economic Relations said.

The main items India imports are fresh fruits, cement, petroleum products, bulk minerals and ores and finished leather. The major exports to Pakistan include raw cotton, cotton yarn, chemicals, plastics, manmade yarn and dyes.

“The MFN withdrawal could have implications mainly for cement imported from Pakistan,” Taneja said. Industry sources said Pakistani cement sold mostly in northern India is almost 10-15 per cent cheaper than Indian cement and the revoking of MFN status may help domestic industry “marginally”.

Data from the Directorate General of Foreign Trade showed that the total import of cement during 2017-18 was 16.82 lakh metric tonnes. Out of this, industry sources say, 76 per cent — around 12.72 lakh tonnes — was from Pakistan.

“Pakistan could react to our withdrawal of MFN status by imposing barriers to Indian exports, which they have done in the past in times of tension… this would not really reduce the trade but simply push some of it underground by routing the trade through third countries,” said Dhar.
https://www.telegraphindia.com/indi...oo-low-for-mfn-withdrawal-to-hurt/cid/1684656

 

[Cash GK]

Pakistan's exports to India too low for MFN withdrawal to hurt
Some impact to be felt in cement market in north India

By Jayanta Roy Chowdhury and R. Suryamurthy in New Delhi

• Published 16.02.19, 4:43 AM
• Updated 16.02.19, 10:16 AM

• 2 mins read

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Vigil outside the Pakistan High Commission in New Delhi as security was tightened following anti-Pakistan protests in the capital after the Pulwama terror attack. PTI
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India’s decision on Friday to withdraw the “most favoured nation” status from Pakistan is unlikely to cause any major tremors in either country as the total trade between the hostile neighbours had stood at just $2.4 billion in 2017-18, accounting for a mere 0.31 per cent of India’s total trade with the world and just about 3.2 per cent of Pakistan’s global trade.

India’s grant of MFN status to Pakistan in 1996 simply allowed Pakistani exporters to sell to India on the same terms as all other signatories of the World Trade Organisation. It did not give the neighbour any preferential treatment.

“The withdrawal today is a strong signal but also a symbolic one as the two nations don’t really trade with each other much,” said Prof. Biswajit Dhar of the Centre for Economic Studies and Planning, Jawaharlal Nehru University.

“Usually once granted, an MFN status is not withdrawn, that is why we say it’s a strong signal… but India can always say this is a reciprocal step since Pakistan never returned the favour to us.”

All WTO signatories are duty-bound to give other signatory nations equal treatment while levying import duty or allowing entry of goods, under the MFN norm.

Despite signing the WTO agreement, Pakistan has for two-and-a-half decades dithered on granting India MFN status, partly because local industry protested fearing loss of their market.

But observers say it was also because the literal translation of most-favoured nation into Urdu as “sabse pasandida mulk” gave ordinary Pakistanis the impression that this was a major giveaway to India.

Consequently, Pakistan maintains a negative list of 1,209 products that cannot be imported from India. It also imposes high tariff on those goods and services that are allowed entry. Banned goods from India include textiles, garments, pharmaceuticals, plastic and polymer, cars, trucks and auto parts.

Still, the total trade between the neighbours increased by 6 per cent in 2017-18 to $2.4 billion, with India selling $1.9 billion worth of goods to its neighbour and Pakistan selling about $500 million worth of goods to India. Trade through third countries — usually the UAE and Singapore — is estimated to be worth about another $5-10 billion.

“The revoking of the MFN status in trade terms will have a marginal impact as the volume of trade is very low. For Pakistan, the quantum of export to India is just 1.5 per cent of its total exports to the world,” Prof Nisha Taneja of the Indian Council for Research on International Economic Relations said.

The main items India imports are fresh fruits, cement, petroleum products, bulk minerals and ores and finished leather. The major exports to Pakistan include raw cotton, cotton yarn, chemicals, plastics, manmade yarn and dyes.

“The MFN withdrawal could have implications mainly for cement imported from Pakistan,” Taneja said. Industry sources said Pakistani cement sold mostly in northern India is almost 10-15 per cent cheaper than Indian cement and the revoking of MFN status may help domestic industry “marginally”.

Data from the Directorate General of Foreign Trade showed that the total import of cement during 2017-18 was 16.82 lakh metric tonnes. Out of this, industry sources say, 76 per cent — around 12.72 lakh tonnes — was from Pakistan.

“Pakistan could react to our withdrawal of MFN status by imposing barriers to Indian exports, which they have done in the past in times of tension… this would not really reduce the trade but simply push some of it underground by routing the trade through third countries,” said Dhar.
https://www.telegraphindia.com/indi...oo-low-for-mfn-withdrawal-to-hurt/cid/1684656

indian exports to pakistan is around 6 billions via dubai... pak should stop them as soon as possible

 

[maximuswarrior]

Just like I explained in another thread.

 

[Chhatrapati]

indian exports to pakistan is around 6 billions via dubai... pak should stop them as soon as possible

That 0.3% will break our economy badly.

 

[khail007]

That 0.3% will break our economy badly.

Sir, general phenomenon is that it hurts more in reference to pockets.
That's why in world there are heavy fines of offences.
Did you ever think, why the ratio of farmers committing suicide in India is highest in the world?

 

[Imran Khan]

That 0.3% will break our economy badly.

AND we will die for 500mn per year

 

[Cash GK]

with that mo

That 0.3% will break our economy badly.

with that money you can build toilets for your people who are dying on railroads ... so we are going to stop that. so kashmiri don’t waste lives to kill indians. because they are getting killed himself on railroads

 

[Chhatrapati]

Sir, general phenomenon is that it hurts more in reference to pockets.
That's why in world there are heavy fines of offences.
Did you ever think, why the ratio of farmers committing suicide in India is highest in the world?

Khail sb, there is a lot of reasons, neither of which involves loss of trade with Pakistan which is the point of the thread.

Our main export commodities to Pakistan are cotton and rubber (synthetic and non synthetic), which have main export market in BD. I do understand there is no point in messing with trade relation but what can I say, it's an old tested retaiation around the world. i.e messing with the trade. Every country does that, and so does India.

 

[Imran Khan]

Khail sb, there is a lot of reasons, neither of which involves loss of trade with Pakistan which is the point of the thread.

Our main export commodities to Pakistan are cotton and rubber (synthetic and non synthetic), which have main export market in BD. I do understand there is no point in messing with trade relation but what can I say, it's an old tested retaiation around the world. i.e messing with the trade. Every country does that, and so does India.

our main export to india is vegitables and cement . i wish food items banned to export people of our country should eat them and cement have huge market even GCC is enough for us to export . recently saudi market open the doors for Pakistani cement .

 

[khail007]

Khail sb, there is a lot of reasons, neither of which involves loss of trade with Pakistan which is the point of the thread.

Our main export commodities to Pakistan are cotton and rubber (synthetic and non synthetic), which have main export market in BD. I do understand there is no point in messing with trade relation but what can I say, it's an old tested retaiation around the world. i.e messing with the trade. Every country does that, and so does India.

Sir, I do understand the issues to some extent and not much expert on them.
Trade is for mutual benefits of the states, if practised with healthy principles. I have seen many nice and versatile machines manufactured in India with price tag in reach of common man in Pakistan.
But alas the core issues still there and I don't see any positive change until both governments sincerely committed to negotiations.
But in present scenario, sorry to say that I feel more wickedness in this to malign Pakistan; else India could take the step in discussion, before Pulwama incident. Simply the intentions are not for peace in the region.

 

[Chhatrapati]

Sir, I do understand the issues to some extent and not much expert on them.
Trade is for mutual benefits of the states, if practised with healthy principles. I have seen many nice and versatile machines manufactured in India with price tag in reach of common man in Pakistan.
But alas the core issues still there and I don't see any positive change until both governments sincerely committed to negotiations.
But in present scenario, sorry to say that I feel more wickedness in this to malign Pakistan; else India could take the step in discussion, before Pulwama incident. Simply the intentions are not for peace in the region.

Khail Sb, Healthy trade is not possible under these kinds of situations.

Besides, this is nothing new. There is an on going Boycott Israel going on among Muslim nations incl Pakistan even when there is no border exist between Pak and Israel. Whatever be the reason. It'll be hypocritical for you to call this foul.

As I mentioned before in a similar thread, we don't need to Malign your image, you're doing it by yourselves by giving support to armed militancy in Kashmir. These actions of them will have it's repercussions.

 

[khail007]

It'll be hypocritical for you to call this foul.

Sir, according to your statement, then we should not complain to each other or to world and keep on with what is happening.

As I mentioned before in a similar thread, we don't need to Malign your image, you're doing it by yourselves by giving support to armed militancy in Kashmir. These actions of them will have it's repercussions.

Sir, now here again, a typical rhetoric. We are not supportive of armed militancy in Kashmir, you themselves responsible of it. What Kashmiri's are doing, it is totally their own struggle - we are against any terrorist activity committed by anyone in Kashmir. Don't listen to us, though I am not fan of Farooq Abdullah, listen to him in media interview.
Just think of circumstances, the person highlighted in media was in Indian custody since 2017. How he able to get in such high alert security area with 300/350 kgs of explosive.

 

[Chhatrapati]

Sir, according to your statement, then we should not complain to each other or to world and keep on with what is happening.

I don't think you get me fully. What I meant in my previous posts is "all is fair and square". Otoh I'm not a fan of using trade, but I agree sometimes messing with trade have some impact.

Sir, now here again, a typical rhetoric. We are not supportive of armed militancy in Kashmir, you themselves responsible of it. What Kashmiri's are doing, it is totally their own struggle - we are against any terrorist activity committed by anyone in Kashmir. Don't listen to us, though I am not fan of Farooq Abdullah, listen to him in media interview.
Just think of circumstances, the person highlighted in media was in Indian custody since 2017. How he able to get in such high alert security area with 300/350 kgs of explosive.

It's not a rhetorical answer sire, this is infact the truth. Should I bring links to verify my claims? Google is your friend, please take a look unless you knew it already. This is no ordinary Kashmiri, he is part of a Pakistan based organization, who proudly owned him and the attack. Need I say more?

Let's say for arguments sake, Bajrangdal (an extremist Hindu group) organized a terror attack in Pakistan with the help of local Baloch, aquired some explosive from restive regions of Pakistan, killed scores of your Para military soldiers with Syria style car bomb ramming. Do you ponder much into how he acquired these stuff, or outright call actions against India who supported this action?

 

[khail007]

I don't think you get me fully. What I meant in my previous posts is "all is fair and square". Otoh I'm not a fan of using trade, but I agree sometimes messing with trade have some impact.

So Sir, leave it aside. Pakistan always a looser in trade. I don't see any country brought other to the knees with trade sanctions.
The brilliant example is Iran, Cuba and North Korea.

It's not a rhetorical answer sire, this is infact the truth. Should I bring links to verify my claims? Google is your friend, please take a look unless you knew it already. This is no ordinary Kashmiri, he is part of a Pakistan based organization, who proudly owned him and the attack. Need I say more?

Let's say for arguments sake, Bajrangdal (an extremist Hindu group) organized a terror attack in Pakistan with the help of local Baloch, acquired some explosive from restive regions of Pakistan, killed scores of your Para military soldiers with Syria style car bomb ramming. Do you ponder much into how he acquired these stuff, or outright call actions against India who supported this action?

Yes ... Pakistan faced it many times in the past. We are not always jumping to conclusions ... we fenced our western borders and there is much calm is prevailing (though Afghanistan & USA were very vocal against it.) We captured someone Mr Kalbhushan from Balochistan and also much issues are under control and soon going to be.
Again advise you upon Kashmir issue to go for recent Indian media interview with him - thanks.

 

[Chakar The Great]

That 0.3% will break our economy badly.

You should be asking that to Modi G. Who fools you every time.