Pakistan-India Economic Relations, Prospects for South Asian People

 PAKISTAN-INDIA ECONOMIC RELATIONS.

Trade is instrumental in achieving and maintaining peace and stability in relations between PK and India. The importance of trade in Pak-India peace process is essential. Economic interdependence promotes peace and mutual economic benefits preclude war between nations. Enhanced and Cordial Economic and commercial relations can play a soft and positive role in conflict resolution between the two adversaries. The normalized Pak India trade relations are of paramount importance for the Southa Asian. There are enormous economic and political benefits from unexploited trade between the two countries. Trade is certainly one of the most important pragmatic measures for fostering bilateral ties.

Historical Background

Since the inception of India and Pakistan as independent states, a long-term confrontation has been witnessed between two nations. For almost seven decades the region has witnessed four major armed conflicts (1948, 1965, 1971 and 1999) between both countries. Throughout the history, two nations remained in a continuous conflict and have limited bilateral relations .Despite various efforts the two states failed to resolve their differences amicably. Both the countries have troubled record of accomplishment due to political and armed conflicts. They should agree to make result oriented efforts to solve all bilateral thorny issues. They should pledge not to interfere in each other’s internal matters. The new international environment that emerged after 9/11 further complicated both India and Pakistan‘s relations. The higher volume of formal trade will increase economic dependence of Pakistan and India on each other. Resultantly, both governments will be compelled to normalize their political relations and resolve their border disputes in an amicable manner. Increase in bilateral trade can help in resolving the political issues and reducing poverty. They should realize the fact that bilateral trade will act as a cementing forced should concentrate on making efforts for promoting two-way trade. Bilateral trade can be instrumental in removing misperceptions between the people of Pakistan and India as well. Direct trade will help in enhancing people-to-people contacts.

PEACE THROUGH BILATERAL ECONOMIC and COMMERCIAL TRADE

Trade promotes peace, reduces conflict and accelerates the economic activities. The low volume of trade between Pakistan and India is due their territorial and border disputes. If bilateral trade is increased the mutual economic benefits will also increase and thus it would discourage cross border terrorism and violence. Economic interdependence promotes peace and tranquility because conflict is inconsistent with mutually beneficial economic ties. In fact, trade facilitates bargaining over some political and border issues and can be used as a tool that can influence decisions of the leaders on the territorial disputes such as Kashmir, Sir Creek and can create a cordial atmosphere needed to take new initiatives. The trade and economic cooperation between them can reduce tensions and distrust and can ultimately bring peace and tranquility to the whole region.

Barriers to Bilateral Trade

Politically India and Pakistan are perceived archrival. Since independence, bilateral economic relation has been adversely effected by political factors. With a vision to enhance peace and prosperity to flourish in the region, the two countries should progress toward a close economic relation realizing the synergy of bilateral potential. Escalating tensions between India and Pakistan have always threatened peace in the sub-continent; hence both countries should in the interest of people improve their economic relations through economic diplomacy so that regional peace and security can be maintained.

It is a general view that better economic relations between the two countries are marred by the territorial disputes and cross-border terrorism and therefore trade cannot play a role in improving bilateral relations. Trade relationships between Pakistan and India have been weak. Wars, reforms, politics, and a general distrust has stalled the growth of developing economic ties.

There is no country in the world which is self-sufficient and produces all the commodities it needs. Textile industry is the backbone of Pakistan’s economy and one of the biggest sources of foreign exchange earnings. Pakistan is also a leading producer and exporter of leather products. It is in the mutual interest of Pakistan and India to strive for an enduring bilateral economic and political relationship. Despite political conflicts, trade expansion between India-China, China-Taiwan, US-China, and US-Russia illustrate that economic cooperation is an effective instrument in improving interstate relations. Pakistan and India can establish a trade relationship that can pave a way for resolving political and border disputes, including Kashmir, between the two long time nuclear-armed rivals.

Suggestion for increasing Economic Relation.

It is a proen fact that Trade between nations directly contributes to peace and tranquility. Trade creates an economic interest. Strong economic ties between Pakistan and India are essential for the peaceful resolution of the territorial disputes. It is true that conflicts have hampered Pak-India bilateral trade but it is also equally true that more trade will be a significant confidence building measure, which will facilitate peace and reduce tension.

Pak-India mutual trade can be promoted and enhanced by taking some major steps including a) elimination of non-tariff barriers to trade;

b) Facilitation of the cross-border movement of goods;

c) Promotion of conditions of fair competition and equitable benefits;

d) Creation of effective mechanism for the implementation and application of the agreement;

e) Simplification of customs clearance procedure and banking procedures for import financing.

Both the countries should discuss a roadmap for removing bottlenecks in liberalization of bilateral trade. They should remove all hurdles blocking economic trade relations. Unless the territorial disputes between two countries are resolved, trade and economic cooperation will remain low. A relationship, which is based on trust and willingness and is backed by economic and commercial links, can pave a way forward in the name of peace and prosperity.

Prof Dr Qayum Mangi, Principal CSS Academy Sukkur, Sindh. 03063699246