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The incoming government seems eager to improve Indo-Pak bilateral relations. News reports since the May 11 elections in Pakistan suggest positive vibes emanating from both sides of the border, which indicates the accumulation of much-needed political capital at the leadership level.
Background interactions show that there is also a revival of optimism now for the trade normalisation process that was started by the last government. The process was stalled after the PPP-led government could not follow up on its announcements of MFN status to India and abolishment of negative list of trading items earlier this year.
The constituency for bilateral engagement is growing in Pakistan. Proponents of enhanced Indo-Pak trade regime approach the issue from consumer welfare angle. They argue that since trades ultimate beneficiary is a consumer, restricting Indo-Pak trade will limit the choices for Pakistani consumers who may have to compromise on price and quality issues.
On a broader level, they view trade normalisation as a means to encourage more social exchange.
However, not everyone is sold on Indo-Pak trade prospects. The hawks are invariably the producers who are foretelling annihilation of domestic industry from Indian exporters when local industries are losing their competitiveness through crises of energy, security and investor confidence. They also refer to the Indian non-tariff barriers that make their export prospects bleak in that huge market.
Therefore, mere political ownership of this process may not be enough to break ground - the buy-in from reluctant manufacturers and agriculturalists also needs to be there. To move beyond the ongoing hawks-vs-doves discourse, it seems that detailed studies need to be undertaken.
While a few studies have quantified the cost of economic non-cooperation to consumers in South Asia, studies are required from the producers perspective. There are two levels on which such studies can be commissioned. First, there should be sector-specific studies which identify the possible impact of opening up trade with India on domestic commerce and industry.
Secondly, for the benefit of Pakistani exporters, studies must be conducted that furnish information on the trade, custom and certification laws and regulations followed in different Indian states. Different laws and procedure adopted by different Indian states create confusion, and their first-hand knowledge can help local exporters in adapting to Indian trade regime just as the Chinese have.
Since the Ministry of Commerce hasn commissioned such studies despite repeated demands, the initiative could be undertaken by donors and think tanks working on the Indo-Pak relations. This also presents an opportunity to the academia, especially the economics departments of Pakistani universities, to research on this burning private sector issue and come up with policy recommendations.

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