This is a sure-fire path to the destruction of Pakistans industries, many patriots or pseudo-patriots are quick to comment on the recently granted MFN status to India. But, is it wise to bury your head like an ostrich when the world, in a clichéd view but aptly true metaphor, has become a global village? Probably not! It is contended that with a population of over 1 billion people, Indian industries have been serving a far larger market than Pakistani counterparts who cater to a population which is less than 15 percent of that in India. The ensuing economies of scale, therefore, are bound to give Indian products a competitive edge, particularly in terms of pricing, which pose a clear threat to local products, thus explaining the destruction of local industries. A case in point is Pakistans auto industry-the most avid critic of this preferential status for India. Industry sources claim that owing to much smaller market for cars in Pakistan relative to India, the local auto industry is bound to receive a severe blow. Traders in other industries are also far from pleased. "Pakistan has not yet reached competitive levels in terms of its exports especially in terms of quality," said Iqbal Umar, a raw cotton exporter, "India is way ahead of us and allowing its products to be imported will be critically detrimental." But there are also industry players who claim all is not too bleak. Ibrahim Mahmood, research officer at Pakistan Readymade Garments Manufacturers and Exporters Association says: "As far as the textile and garments industry is concerned, the unit prices of several Indian products are dearer than of Pakistani products. Further, most of its products belong to a different niche, such as banarsi, and we e not under any threat. If anything, it is a good step because the consumer will have more options and choices when Indian products are brought in the market." Mahmoods proposed benefit of greater choice is not the only one. The opportunity can be tapped to import and transfer technology, which is truly an imperative if real growth in the industrial sector of Pakistan, is prioritised. An influx of Indian products and the resulting competition can also be hoped to propel local industries to shift to the top gear and work towards value-addition and quality-enhancement of local products. A glance at the Indian and Pakistani rupee exchange rates helps calm the nerves of the apprehensive ones as far as the granting of MFN status to India is concerned. The Indian rupee has appreciated considerably in the past few years against the Pakistani rupee, offsetting, to some extent, any competitive gains of Indian products flowing into Pakistan. Besides, apart from the nitty gritty of the MFN, Indian products are nothing new to Pakistans markets as the Financial Times quoted late last month: "India and Pakistans official bilateral trade is estimated at just $2.7 billion with another $3 billion in illicit flows, which are often routed through third countries in the Gulf." So, while the presumed threats of granting the MFN status to India are not entirely false, there are definitely positive factors that should not be ignored. There are ways of protecting any sensitive industries that need some support in the form of non-tariff and para-tariff barriers. But overall, local industries need to get out of protected shells and compete on a globalised level, as Mrs Hina Khar aptly quoted to the Financial Times: "In todays world its not possible to not recommend freer trade to anyone."
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