New Delhi, Jan. 12: Trade relation with Pakistan is set to improve with Islamabad likely to reduce the negative list of items from India and a possible increase in the number of goods to be traded through the Wagah border.
However, an announcement on the grant of “most favoured nation” (MFN) status to India is unlikely.
Commerce minister Anand Sharma is slated to meet his Pakistani counterpart Khurram Dastgir Khan on Thursday on the sidelines of a Saarc ministerial meet here.
They are expected to “review the progress in trade relations and chart out a map for future action”, officials said.
They indicated that Pakistan could make an announcement on allowing the import of more goods, including pharmaceuticals and agricultural items. Both sides will also consider relaxing the business visa regime.
At present, India can export all items to Pakistan barring the 1,209 products on the negative list. Moreover, only 137 items can now be traded through the Wagah border, though the total number of tradeable items runs into thousands.
India can now export around 7,500 items against 1,946 earlier. The positive list contains vegetables, meat products, animals, fruits, tea, spices, palm oil, crude oil, sugar, cotton and organic chemicals among others.
The grant of the MFN status means the two countries can trade on equal terms, offering each other low tariffs and higher import quotas.
The elimination of the negative list will automatically translate into the grant of MFN status. India gave the status to Pakistan in 1996. Islamabad has already missed the deadline.
An initial deal for the export of 500 megawatt of electricity to Pakistan will be signed during the meeting.
Analysts said bilateral trade potential was estimated at $19.8 billion, which is several times more than the current levels.
India is in a position to export $16 billion, while Pakistan is capable of exporting $38 billion. New Delhi is also in a position to export as much as $10.7 billion of mineral fuels such as petroleum, coal and natural gas. Pakistan can export $1.3 billion.
The commerce secretaries of both the countries, who had met in September 2012, had signed three agreements for co-operation in customs, redressal of trade grievances and conforming to quality standards. Both the sides have also planned to liberalise trade in sectors such as power and petroleum.
The dialogue to normalise trade with Pakistan started in 2011. Trade stood at $2.6 billion last fiscal, with a target of $6 billion for this fiscal.