Islamabad, December 11, 2013

“Neighbours and boundaries cannot be changed, but mind sets will need to be changed”, said Mr. Khurram Dastagir Khan, Minister of State for Commerce and Textile Industry, Pakistan.

He was speaking at the 11th CUTS 30th Anniversary Lecture event organised by CUTS International and Sustainable Development Policy Institute here today (

“Global integration is extremely important in order to strengthen trade relations among countries. Operationalization of SAFTA was a limited success story for India and Pakistan, as inter-regional trade has not been effective though there is huge potential, said Mr Khan. “Thus, we would need to recognise liberalisation of trade among SAFTA countries, ensure more market access and create level playing field among the nations”.

Mr Khan emphasised that we need to have consistent and sustainable relation to get over with poverty in the region. Bilateral trade equation is complex and any untoward incident can derail the process of dialogue. The need of the hour is for relations between India and Pakistan to be uninterruptable.

He said that one question which is often asked by stakeholders in Pakistan i.e. will expansion of trade with India benefit to Pakistan or endanger its domestic industries.

According to Mr. Khan, the trade between India and Pakistan is a win-win situation for both the countries, as supported by studies done undertaken by CUTS and SDPI.

He shared with the audience that even a 10% share of access to markets in India will double the market boom in Pakistan. He emphasised that we cannot have a favourable trade balance with all countries and he acknowledged that we do have a negative trade balance with India.

Khan said that it was India who granted MFN to Pakistan in 1996, however, instead of trade rising between the countries, our experience has been the opposite. He emphasised that it is imperative that India must reduce the non-tariff barriers and provide a level playing field. What we want is to have a non-discriminatory access to both countries’ economies.

“It is a well-known fact that bilateral trade between India and Pakistan is currently far below what it ideally should be. There is ample literary evidence available on the underutilization of trade opportunities that exists between India and Pakistan” said by Mr. Pradeep S Mehta, Secretary General, CUTS International.

While both countries have been successful in bringing forth trade reforms that advanced their respective levels of trade integration with other trading partners, leaders of both countries have been apprehensive about exploring trade with each other, the main reason being a longstanding miscalculation of the net of economic gains and political losses out of trade.

Mehta further mentioned, CUTS studies have shown that facilitating trade in these products can easily triple the current volume of bilateral trade and take to about US$12bn per annum. The benefits to consumers and producers in both countries owing to enhanced bilateral trade would be manifold.

In conclusion, Mr Mehta mentioned that it is heartening to note that the track 2 level efforts that we have been carrying forward with partner organizations like SDPI and a large number of stakeholders from both countries are gaining traction.

Our effort has been one of the important ingredients in keeping alive the bilateral dialogue process. We need to expand the scope and reach of the ongoing dialogues by including and participating in a wider set of stakeholders in the dialogues. One of the tools that we have in mind is that of civil-military dialogues on areas of bilateral economic cooperation including trade.

Also speaking on the occasion were Mr. Aqdas Ali Kazmi, Former Joint Chief Economist, Planning Commission of Pakistan; Mr. Amin Hashwani, Hashwani Group, Karachi; Mr. Shaban Khalid, President, Islamabad Chamber of Commerce and Industries, Islamabad and Dr T C A Raghavan, High Commissioner of India to Pakistan, who Chaired the session.

Dr Raghavan briefly spoke about the importance of Pakistan and India relationship and the fact that they both face nearly the same challenges. Thus, it important for effective collaboration between India and Pakistan, as one can learn from other and he was of the opinion that such collaborations would be fruitful.

According to Dr Raghavan, there are two key issues one needs to focus on i.e. Policy i.e. how do we move towards a more stable trade relationship and challenges pertaining to infrastructure. He emphasised on the need for longer trading hours, opening of more border crossing points and that all trading points should be open for all trading items between the countries.

Dr Hashwani, laid emphasis on the need to privatise the peace process. According to him, businesses don’t have baggage and they can be effective problem solvers. Thus, the governments on both the sides, should put the businesses on peace process and they should be part of the decision making process.

Towards the end, he emphasised that there is need to connect emotionally, if we want nations to come together. He suggested using cricket as a platform to ensure better integration among the countries and suggested formation of a regional team (India and Pakistan players) and rest of the world.

Mr. Shaban Khalid, mentioned that the business community is excited about the future. He drew the attention of the audience on the Negative and Positive List and provided an example i.e. steel is being imported into Pakistan from India via Dubai, which increases the cost of the product. Thus, there is a need to advocate for review of negative and positive list between the countries.

Mr Khalid also emphasised on the need for harmonisation of quality standards. He mentioned that we have different quality standards in both countries, which has led to a lot of problem. He gave the example of cement from Pakistan lying on Indian borders because of certification issues.

The Minister, Mr Khan also released a CUTS publication: “Building Peace through Trade-The Future of India-Pakistan Trade & Economic Relations”.

There was a lively Q&A session, when numerous micro and macro issues were raised by the over 100 participants in the hall.

For further information please contact:
Udai S Mehta, +919829285926 or +12022584856,