MFN status to India The term, Most Favoured Nation is deceptive.

It doesnt mean a country is granting huge concessions to another rather it clarifies the two to not discriminate each other according to the World Trade Organization (WTO). Unfortunately, Pakistan has always discriminated India. A booklet of 1,945 items lists trade allowed to run from India to Pakistan but only 108 can be trafficked directly by road through the border post at Wagah, near the eastern border city of Lahore. India should have MFN status, a step to removing discriminatory higher pricing and duty tariffs. MFN would not allow Indians to export everything to Pakistani market. Moreover,
authorities of the two countries were seriously working to save local industry from any adverse impact.

a recent rapprochement that looks to normalise trading relations between India and Pakistan could end a decades-old system that stifles business and saps profits through networks of middlemen, money changers and smugglers.

People fear that Pakistan will be flooded with cheaper Indian goods, strangling domestic business. China has failed to do so. The main difference between India and China is confidence, if Chinese cheap goods cannot close our factories, Indias will not. granting of MFN status to India is in Pakistans interests as it will allow diversification and increase in exports. Pakistan needs to diversify its export destinations, as currently 50 per cent of its exports go to either United States or European Union. Secondly, our imports from India come mostly through third countries adding to costs. Thirdly, all successful trading nations build on their regional base. In contrast, our regional trade is less than five per cent. It is a fact that India used to be a closed economy but it has been gradually opening up. Its imports are now growing at a fast pace. Pakistan should try to benefit from this opening of Indian economy. An example is when Pakistan started exporting cement to India, many exporters complained of difficulties in meeting the Indian standards because of bureaucratic hurdles. However, these problems have been resolved to a large extent. Now the main problem is non-availability of railway carriages. If India allows import of cement through Wagha border by road, Pakistani exporters may be able to export up to 10 million tonnes as India is facing a shortage and Pakistani cement is more competitive. Pakistan has comparative advantage in textiles sector in particular bed-linen and towels. Likewise, in several light engineering products such as surgical goods, cutlery and sports goods Pakistan would have an edge and can get a good market share. On the other hand, for heavy machinery, Indian manufacturers would be in an advantageous position. For autoparts, India may replace traditional suppliers such as Thailand and Taiwan. MFN status does not mean that tariff rates will be brought down to zero. Currently custom duty and other taxes on imports of vehicles are more than 100 per cent, which is enough of protection so even though Pakistan doesnot have economies of scale and india automobile are cheap it will have no impact on Pakistani economy and also in pharmaceutical industry imports of medicine will be controlled through Drugs Rule, 1976. Pakistan is already allowing

import of some high quality life-saving drugs from India. They are much cheaper than importing from Europe. And quality of Pakistani pharma are good in relation to india they will also get good market in india if mfn status to india will be given. In agriculture, it is likely to be a balanced picture. In some cases Pakistan has advantage over india and in some cases india has advantage over Pakistan. This will stabilise prices, bring down inflation and make these products more available.

At old markets in Lahore, traders peddle whitening creams and hair dyes that have journeyed from India to Karachi by sea bound for Afghanistan, before being reloaded and smuggled along the Hindu Kush to re-enter Pakistan. Along the way a simple anti-wrinkle cream rises from Rs 75 (85 cents) to Rs 160 ($1.82), while black hair dye doubles from Rs 5 to Rs 10. Tonnes of industrial chemicals and drugs travel into Dubai, where their port of origin is relabelled to hide their Indian provenance before being sent on to Pakistan. The process entails a mark-up of 15-20 percent, say importers.