News24

India praises Pakistan trade policy

2012-03-01 16:47

New Delhi, - India on Thursday welcomed Pakistan's decision to phase out major restrictions on Indian imports by the end of this year, a move to normalise trade ties between the nuclear-armed neighbours.

India's Foreign Minister SM Krishna thanked Pakistan for deciding to gradually scrap the "negative list" that prevents the export of hundreds of items from India.

"Pakistan is moving in the right direction in terms of bringing economic content into the political relationship," Krishna told reporters in New Delhi. "This would certainly help strengthen our bilateral ties."

Islamabad has decided in principle to phase out the negative list between the two countries by December 31 2012, which will complete the trade normalisation process.

India's Associated Chambers of Commerce and Industry, a trade body estimated that the move will increase cross-border trade to over $6bn by 2014.

Direct trade between India and Pakistan currently constitutes less than 1% of their respective global trade. India exported goods worth $2.33bn to Pakistan last year while its imports were $330m.

In 1996, India granted Pakistan "most preferred nation" status which is intended to remove discriminatory higher pricing and duty tariffs.

Pakistan agreed in principle to grant a similar status to India in 2011, paving the way for a radical change.

Deepening economic engagement between the two countries is seen as crucial to establishing lasting peace in the troubled South Asian region.

Relations between India and Pakistan, which have fought three wars since the subcontinent was partitioned in 1947, have been plagued by border and resource disputes and accusations of Pakistani militant activity against India.