SLUG: 2-305054 India/Pakistan/Trade (L)
INTRO: A group of Pakistani business leaders is on a six-day visit to India to revive trade ties. As Anjana Pasricha reports, the visit comes amid a thaw in relations between the South Asian rivals.
TEXT: The nearly 100-member Pakistani delegation crossed into India expressing optimism that closer ties between the business communities on both sides will encourage politicians to resolve their differences.
It is the largest-ever business group from Pakistan to visit India. In New Delhi, its members will meet leading industrialists and officials to explore ways of developing trade links.
Trade between the two countries has been a victim of their tense political relationship. It is restricted to about 900 items, and adds up to 250-million dollars annually. But the illegal trade is estimated to be six times higher at one-and-a-half-billion dollars.
Economists like C-D Wadhwa at the independent Center for Policy Research say politics is holding back the potential of bilateral trade.
/// WADHWA ACT ///
If India-Pakistan decide to normalize, and bring the informal trade into formal trade, and restrictions are removed, I think the potential will be quite significant. The number of commodities that can get into the net is much, much bigger than the restricted items, which are allowed today.
/// END ACT ///
Indian officials agree, saying bilateral trade has the potential to grow to four-billion dollars in three years.
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Pakistan needs a host of items that India produces, such as sugar, tea and engineering goods. India could import agricultural products, textiles and other consumer items. At the moment, some goods, such as Indian tea, reach Pakistan via third countries, such as Dubai and Singapore.
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The ease in the relationship started in April. It has raised the hopes of business people on both sides, who are urging their governments to move faster to normalize ties. For a start, they say, transportation bottlenecks should be removed as quickly as possible.
Both countries decided to restore air, road and rail links that were snapped in December 2001, but implementation has been slow. A bus link between the two countries is to be restored sometime this month, but as yet, no date has been set to resume air and rail links.
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As a result, part of the Pakistani delegation arrived in New Delhi via Dubai; others came on a long road trip.
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India says both countries should take steps to improve trade links quickly, while moving more cautiously to untangle the more difficult issues, such as their dispute over Kashmir. The Himalayan region is divided between them, but claimed in its entirety by both. (SIGNED)
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