The celebrations come in the wake of the federal cabinet’s decision on Wednesday to expand trade with India, starting January 2013. Earlier, Pakistan maintained a ‘positive list’ enumerating some 1,946 items which India could export to Pakistan and a ‘negative list’ of 1,209 items it couldn’t. Under the new rules, the number of items available for export to Pakistan will jump to almost 5,600, paving the way for the granting of Most Favoured Nation (MFN) status to India by year-end. And the commerce ministry is expected to shortly send a notification to the law division for replacement of the positive list with a negative list.

Amin Hashwani, the president of Pak-India CEOs Forum, thinks this bold decision will go a long way towards trade normalization and scoffs at fears expressed by some industries. “This is not a one way road – India will also open its markets for Pakistani products which will increase Pakistan’s exports,” he said.

Economist Dr Ayub Mehar agrees with this assessment. “Pakistan’s consumer goods will find a bigger market and Indian industries having fixed research and development costs will have advantage,” he said. Mehar is also arguing for both countries to enhance the scope of trade by including investment in the regime.

The move is also expected to positively impact regional trade, in line with global trends. Karachi Chamber of Commerce and Industry president Mian Abrar says the new regime may also spur other countries in the region to enhance trade with Pakistan.

Meanwhile, other such as Shakeel Ahmed Dhingra, vice president (elect) of the Federation of Pakistan Chambers of Commerce and Industry think the new policy will help Pakistani importers purchase cheaper raw material from India.

But others are less sanguine about the new policy. Pakistan Business Council chairman Asad Umar, who is also the chairman Aman Ki Asha Energy Committee, agrees with the principle but insists that the timetable for switching over to the new trade regime is unrealistic. “All the negative list items would be positive by December 31, 2012, which is too early. We recommend the government decide on a timetable in consultation with stakeholders,” he said.

But Dhingra and SAARC CCI Pakistan Chapter vice president Iftikhar A. Malik think it’s about time local manufacturers stepped out of the safety of their playgrounds. “Domestic industries should now be prepared enough to face the challenges of a globalised trade regime,” insists Malik.

India exported goods worth $2.33 billion to Pakistan last year, while Pakistan’s exports amounted to $330 million. The volume of bilateral trade is expected to reach $6 billion by 2014. The Indian president of SAARC CCI Vikramjit Singh Sahney has said he thinks the current trade volume will double within a year.

What businesspeople say

“Doing away with negative list in ten months is unrealistic. The government should consult stakeholders in framing a timetable.”

—Asad Umar,

President, Engro Corporation

The negative list will give a quantum leap to bilateral trade, which at present stands at $2.5 billion.

—Vikramjit Singh Sahney

Chairman, Sun Foundation, India

This is not a one way road – India will also open its markets for Pakistani products which will increase Pakistan’s exports.

—Amin Hashwani

Director, Hashwani Group

The government has taken an excellent initiative to improve trade with India. Basically we are getting the best of both worlds. The opening of trade will benefit both sides as trading between the two neighbouring countries is going to be much cheaper than trading with the Far East, Europe or the United States.

—S. M. Muneer

Vice Chairman, MCB Bank

This is the beginning of a new phase in the economic journey of the people of Pakistan and India. Several regional countries trade up to 40 percent or more among neighbours and get economic benefits.

—Humayun Bashir

President, OICCI