India to become Pakistan's second largest trading partner

Islamabad, July 19 (PTI) India could emerge as Pakistan's
second largest trading partner after China owing to measures
announced by the government to boost bilateral trade,
including the import of diesel and fuel oil from India.

While announcing the trade policy (2008-09) Friday,
Pakistan has allowed import of diesel and C.N.G. buses from
India, besides adding 136 commodities to the positive list of
items that can be sourced from the neighbouring country.

According to the Dawn newspaper, the measures announced
by the Pakistan government have created the potential for
increasing the value of imports from India from the current
level of USD 1 billion to more than USD 3 billion, which could
make India the second largest trading partner of Pakistan
after China.

Unveiling the trade policy for 2008-09, Commerce Minister
Chaudhry Ahmed Mukhtar said the move to expand trade with
India would allow Pakistan to access cheaper raw materials and
reduce transport costs on imports from far-off countries.

With the inclusion of 136 new items, the total list of
tradeable products with India was increased from 1,837 tariff
lines to 1,938. The value of global imports of these 136 items
was 2.8 billion dollars, of which 2.2 billion dollars was
spent only on import of diesel and fuel oil.

Of the 136 new items, 72 tariff lines were added to the
importable list for raw materials, chemicals and industrial
inputs, 9 for pharmaceutical products, 2 for fruits and
vegetables, 19 for fertilisers, 32 for machinery and parts and
2 for fuel oil and diesel.

After the new trade policy was approved by the Cabinet at
a meeting chaired by Prime Minister Yousuf Raza Gilani,
Commerce Minister Mukhtar said, "Cheaper raw material sourced
from India would make our exports more competitive in the
international market."

The Commerce Minister stressed the need for setting aside
an "Indian phobia" to reap maximum gains from bilateral trade.
"India is becoming an important economic partner and trade
with this country would be in the interest of Pakistan," he
told reporters here.

Other items that can now be imported from India include
academic, scientific and reference books, equipment for
mining, quarrying and grinding of minerals and some raw
materials.

India and Pakistan had announced last year that they
planned to increase bilateral trade from 1.7 billion dollars
in 2006-07 to 10 billion dollars by 2010.