Trade with India: Pakistan faces $1 billion deficit in July-April period of fiscal year 2014

Despite an MNF status granted by India in 1996, trade balance disfavours Pakistan, as it posted a deficit of over one billion dollars in bilateral trade with India during first 10 months the ongoing fiscal year. Traders told Business Recorder on Tuesday that they were still facing difficulties to export goods to India due to non-tariff barriers despite the fact India had granted MFN to Pakistan some 17 years back.
"Though trade between the two neighbouring countries has gradually increased through joint efforts during the last couple of years, however it is still far from its true potential and even not in favour of Pakistan," they added. The State Bank of Pakistan's (SBP) statistics revealed that Pakistan faced some one billion dollars deficit in bilateral trade with India during first 10 months of this fiscal year.
Pakistan's exports to India stood at $351.697 million compared to imports of $1.525 billion from India in July-April of FY14, depicting a deficit of $1.17 billion. The trade deficit with India during first 10 months is almost equal to the same period of last fiscal year, in which the country faced a deficit of $1.19 billion. During the period under review, imports have inched up by some 5 percent, while exports posted an increase of 35 percent. Analysts said that Pakistan exports have a small volume therefore a minor increase in value was witnessed despite huge increase in shape of percentage.
Exports to India surged to $351.697 million in July-April of this fiscal year against $260.784 million exports in the same period of last fiscal year, depicting an increase of $91 million. Imports form India posted an increase of $73.55 million to $1.525 billion in first 10 months of FY14 as compared to $1.452 billion in corresponding period of FY13.
"The federal government is aggressively working to grant MNF status to India, however we as exporter believed that there will be no positive impact of this status on Pakistan-India trade," said Haroon Agar, former president Karachi Chamber of Commerce and Industry (KCCI), which is also a leading trader.
He said that Pakistani traders were facing hurdles in export to India. "Pakistan Customs clears Indian goods in two to three days, while Indian authorities are taking several weeks and some time one or two months for clearance of Pakistani goods imported by Indian traders," he added. "I exported Ajwine (an herb) to India and they took two months for its clearance and release from the port, despite all necessary certificates," he informed.
Presently, Pakistan traders are importing chemicals, pulses, cloth and many other items from India without any hurdle, while Pakistani exporters have issues like testing and certifications. Amin Hashwani, President Pakistan India CEO Forum, said that trade between Pakistan and India would not grow without MNF status. "MNF is in favour of both countries, as under the MNF agreement India will also give access to its potential markets and has already assured to reduce negative list from 1200 items to 500 and after one year it will further shrink to 100 items," he added.
There should be an even level playing filed for traders of both countries to ensure economic development in the region, he said and added that after MFN India will also accept the certificates of Pakistani authorities for exports of commodities. According to SBP, during last fiscal year (FY13) Pakistan faced an imbalance of $1.348 billion as Pakistan exports to India were $328.884 million against its imports of $1.677 billion. It may be mentioned here that for the last few months PML-N government is negotiating with India to grant MFN status and sought access for 250-300 of Pakistani items at low duties, while India had already granted MFN to Pakistan in 1996.