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Give India favoured nation status: Pak panel

Press Trust Of India
Apr 22, 2010 at 03:32pm IST

Islamabad: Pakistan government should consider granting India the 'Most Favoured Nation' status to exploit the huge trade potential as free trade relations with it will enable the country to achieve higher and more equitable GDP growth, an official panel has recommended.

The recommendation was made by the Panel of Economists, constituted by the Planning Commission, in its final report.

The report said as a first step, trade relations between the two countries should be normalised by trading on the Most Favoured Nation (MFN) status.

As a second step, policymakers should address problems related to information exchange, trade facilitation, banking, non-tariff barriers, visas and communication.

The third step is to enable environment for investment has to be created so that India and Pakistan can enter into joint ventures, the Business Recorder daily reported today.

The panel asked the government to allow the import from India of raw materials not available locally.

"It is essential to move from a positive list approach to a negative list approach. It is important for the two countries to have a common Harmonised System of Codes and greater transparency," the panel's report said.

"The current DTRE scheme whereby quotas are fixed for raw material imports from India meant specifically for exports suffers from red-tapism and graft. A better solution is to open up raw material imports across the board," the report added.

The panel also recommended the opening the Attari-Wagah border to allow transportation of goods by road at the earliest as this link is already operational for movement of passengers and asked the government to consider allowing India-Pakistan joint ventures.

"Currently, there are no India-Pakistan joint ventures. As several Indian companies are showing interest in having joint ventures in Pakistan, it is important to understand the nature of such investments and provide timely facilitation," the report said.

The report noted that payments through formal channels assume a greater role as there is evidence of anonymous transactions between trading partners. Currently, the payments system is formalised through the Asian Clearing Union, which is inefficient as payments are often delayed.

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