The smell of money

Last week TSI said trusting Pakistan is foolhardy. But trade and business still make a lot of sense, point out Anando Bhakto & Shakti Sharma

 

Bashir Ali Mohammad, Chairman of Pakistan’s most popular textile house Gul Ahmed, made the most of his recent trip to India. High on the success of his premium lawn, party and casual wear collection back home, the Paki textile king has now set his eyes on India's expanding middle class given the recent thaw
in relations.

 

In the national capital for the first ever Pakistani lifestyle exhibition show 'Lifestyle Pakistan', Bashir sees sizable complementarities between the Pakistani and Indian markets and hopes to set up his brand stores in India as soon the government clears the path. A hard-nosed businessman, Bashir is not moved to this decision by sentimentalities such as fostering peace between our nations. Speaking to TSI, Bashir explains the pragmatic rationale behind his ambition, “We are a brand for the middle-class, and India today has one of the most powerful middle-class populations. Opening our stores here will be beneficial for not only us but for the consumers as well.”

 

That, in a nutshell, sums up the increasing clamour amidst Pakistani businessmen to do business in India. The sentiment was echoed across most of the 600 plus top jewellery, furniture and clothes designers from Pakistan who were part of the four-day exhibition. “Indian consumers were very satisfied with our products. And we received a lot of queries from wholesalers and multi-brand stores,” Nausheen Kamran, owner of Pakistani leather home accessories brand ‘Street 6’ told TSI.

 

The enthusiasm of Bashir and Kamran is just a microcosm of the new blossoming trade and business relations between the two estranged neighbours. At stake is the $10 billion trade potential that exists between the two countries. Compare that to the miniscule $2.75 billion trade between the two nations today, and you realise the golden booty which is up for grabs if borders are made more porous.

 

It’s been a Pakistani fortnight all the way as far as India is concerned. First it was President Asif Ali Zardari who came with son Bilawal in tow to pay his respects at Ajmer Sharif and threw in a few 'amply-photographed' meetings with Prime Minister Manmohan Singh and Rahul Gandhi. Then Pakistani Commerce Minister Makhdoom Amin Fahim came calling to further the positive environment created by the resumption of peace dialogue last year.

 

Islamabad’s keenness to cozy up to India, even at the cost of putting the Kashmir issue on the backburner, is not without reason. Floundering relations with Washington, chaotic internal disturbances, coupled with a dwindling economy have pushed Pakistan into a corner. So much so, that a robust trade partnership has become more important to Pakistan than their traditional ‘bleed India to death’ over Kashmir policy. 

 

India too stands to benefit from engaging Pakistan which is its gateway to central Asian markets. With Pakistan willing to reciprocate, India can now make use of the MFN (Most Favoured Nation) status which it had given Pakistan sixteen years ago. Says Wajahat Habibullah, ex-Chief Information Commissioner, Government of India: "Due to unfortunate developments of 26/11 there was repulsion in India against any engagement with Pakistan. Pakistan too was under pressure from its extremist elements to keep away from trade and other relations with India. But both countries have realised that they need each other.

 

India needs peace in the neighbourhood in order to emerge as a strong global player, while Pakistan needs a friendly neighbour to realise its own economic potential."

 

Experts believe that if both countries can seize on this opportunity, there can even be specific solutions to problems such as the military standoff on the Siachen glacier, the territorial boundary at Sir Creek and the stand-off over water flows through the Wullar Barrage. "India-China or for that matter China-USA are building economic relations as deterrence against war and political stalemate. India and Pakistan too could do the same," proposes Talat Masood, former Lieutenant General, Pakistan Army.

 

The situation on the ground is already changing in tune with the times. Statistics reveal that while the export of cargo from India has by and large remained unchanged, movement of goods into India from Pakistan has increased dramatically over the past year. 

 

In 2011, for instance, the import of cargo from Pakistan was just about 44 thousand tonnes whereas in 2012 the 

imported cargo was 5.3 lakh tonnes. Customs officials say that this sudden increase is because of the growing 

demand for Pakistani gypsum among cement manufactures in India. Other items that are being imported include chemicals, rock salt, soda ash, cosmetics and drugs. In 2011, for instance, as many as 737 trucks of gypsum drove across the border while last year the figure jumped to 8230 trucks. The figure of rock salt imports has also shown significant increase. In 2011 just 58 trucks arrived from Pakistan, while the figure last year stood at 368 trucks. According to customs officials, the last two years have seen revenue collections from customs duty exceed target. In 2010-11 the revenue collection was fixed for Rs 46 crore whereas the actual tax collection was Rs 52.85 crore. Similarly, the customs duty target last year was fixed at Rs 50 crore whereas actual tax collections were to the tune of Rs 81.5 crore.

 

The spanking new trade terminal inaugurated at Wagah border earlier this month is further poised to boost Indo-Pak border commerce. It is estimated that the Integrated Check Post (ICP) will allow 10 times the current 200 trucks which cross the border checkpoint daily. Notably, the Attari-Wagah land is a popular trade route between both countries, especially the Punjab trading community. 

 

Another move that is likely to infuse more chutzpah into the fast-deepening commercial ties between the once hostile neighbours is the in-principle decision to allow Pakistani firms to invest in India. FDI from Pakistan will enable an entirely different level of commercial bonding – which is largely absent from mere export and import of goods. Many believe that if India thus allows Pakistan a stake in its economy, Islamabad will be forced to thwart future attacks on Indian soil.

 

It is not easy for India to trust Pakistan, given the checkered history of our relations. India has fought four wars with Pakistan since independence from the British in 1947, three of them over Kashmir. But the bonhomie for now bodes well for businessmen like Bashir and Kamran who are only viewing India as an objective business opportunity. It’s almost as if the prism of Kashmir does not exist, at least not right now.