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Time to resume India trade, doors will open: Pak’s top industrialist
India can act today to shape tomorrow’s terms of connectivity with Pakistan

India-Pakistan, India-Pakistan relations, India-Pakistan talks, India-Pakistan conflict, Mian Mohammed Mansha, Indian Express, India news, current affairs, Indian Express News Service, Express News Service, Express News, Indian Express India NewsMansha, who heads the Nishat conglomerate, Pakistan's No. 1 business group, told The Indian Express from Dubai where he is at the moment, that there are “many synergies” between the two countries that can come into play once trade begins.

Pakistan’s top industrialist Mian Mohammed Mansha believes it is time his country and India resume trade, and improve relations for their betterment.

Mansha, who heads the Nishat conglomerate, Pakistan’s No. 1 business group, told The Indian Express from Dubai where he is at the moment, that there are “many synergies” between the two countries that can come into play once trade begins.

“I feel very passionately that we need to get our things sorted out with India. Now whatever the issues that are impeding, let them be there. But once they come to one another’s country, through trade, tourism – religious tourism or normal tourism — I think the doors will start opening,” 75-year-old Mansha said.

He said the Kashmir issue had to be resolved with “small steps” to “bring temperatures down”. He also spoke on opening up Bollywood to Pakistani actors and India’s IPL to Pakistani cricketers.

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Earlier this year, the industrialist, counted as the most influential voice of the business community in Pakistan, had called for resumption of trade with India at a meeting of the Lahore Chamber of Commerce and Industry.

Reiterating the statements he made at that meeting, Mansha, whose businesses range from textiles to cement to automobiles, said if India could continue to import from China despite its border issues, there was no reason for Pakistan not to resume trade with India.

“I think there’s nothing better than having good relations with your neighbours. And you can’t change neighbours,” he said, pointing to the advantages that importing from India would give Pakistan.

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“I am a businessman. That’s why I say that if something is cheaper in India, why should I buy that from another country? The transportation cost is less (from India),” he said. “There are so many products that we could buy. We (the Nishat Group) make Hyundai cars. Hyundai India is very big. We could buy some parts cheaper from India, than buying from China, for example. And you are also trading with China in such a large way. Your imports from China are huge, and if you look at it, you also have issues with China on the issue of territories and all that.”

Trade between the two countries dwindled after India doubled tariffs following the Pulwama attack in February 2019. Later, after India’s decisions in J&K that August, Pakistan stopped trade with India.

Last year, days after the powerful Pakistan Army indicated that it had a “geo-economic vision” of South Asia – Pakistan Army chief General Qamar Javed Bajwa outlined this in a speech — Pakistan announced it would begin restricted trade with India for cotton and sugar. However, the decision was abruptly cancelled after several ministers in the then Imran Khan government opposed it.

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Last week, Imran Khan was removed as Prime Minister by the country’s parliament. Though Mansha said he had not met Shehbaz Sharif, the new Prime Minister, in three-four years, he was aware that Sharif was not against resumption of trade with India.

“What I think is we do need to move ahead on the resolution of the Kashmir issue, we could take small, small steps. I do think we need to lower the temperature,” he said, pointing to the “Musharraf formula” that paved the way for cross-LoC trade and bus services that allowed families on either side to meet, interact and do business with each other, though other steps such as reducing military presence on both sides did not take place. Mansha also spoke on the opening of flights from Sharjah as a pointer to the tourism potential of Kashmir.

On trade, Mansha said a beginning could be made with Pakistan importing cotton from India and exporting cement.

“I am in the cement business. We have one big plant, in Chakwal district (of Pakistan Punjab province) where Mr Manmohan Singh was born. We have even preserved the school that he attended. You don’t have limestone in Indian Punjab and areas around the border, so it is much cheaper to buy Pakistani cement. We used to export a lot of cement to India, till all this trading abruptly stopped. So it is not a bad idea if we could import cotton, and we could export some cement to India,” he said.

“I also deal with cotton textile companies, where we want to use Indian cotton. And we also grow a lot of cotton and now we are buying some cotton from Afghanistan, and from so many other countries that we import. Our cotton seasons are slightly different. When you grow cotton, we don’t grow cotton at that time. It would be very good that when our season comes, you could buy it from us. And when yours comes, we could import it from you, rather than paying carrying charges from other countries,” he said.

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Mansha said investment too should begin. “For example, if Tata invests in Pakistan, you will have employees here… and I think interconnections do build up”.

There would be hawks on both sides, he acknowledged, but pointed to the 1978 Camp David accord between Israel’s Menachem Begin and Egypt’s Anwar Sadat as an example of breaking through mistrust and hostility. He also mentioned the North American Free Trade Agreement (NAFTA), which was treated with suspicion at the beginning, but has been beneficial for Mexico, the US and Canada.

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The India-Pakistan cultural relationship, he said, was also important. “Indian movies coming to Pakistan, and Pakistani dramas were being seen in India… Some of our actors got better chances in Bollywood… but the biggest thing we need to start is that our cricketers should be playing in your IPL tournament. And yours could come to the PCL. Cricket is a big business now,” he said.

This month has seen encouraging developments for India-Pakistan relations. Both countries handled India’s accidental firing of a missile with exceptional restraint. An Indian trader sent a consignment of sugar from India to Uzbekistan via Pakistan. And following Russia’s Ukraine invasion, Prime Minister Imran Khan praised India’s independent foreign policy.

For Delhi, all this poses a familiar dilemma. Is Islamabad signalling interest in normalising relations? And if so, can Pakistan be trusted on political and security engagement? Rather than waiting for Pakistan to make up its mind, there is much India can do on its own on the economic front. India must focus on economic initiatives to change Pakistan’s long-term behaviour. By taking unilateral steps on trade and border infrastructure, New Delhi can start working today to favourably shape tomorrow’s terms of connectivity with Pakistan.

Atal Bihari Vajpayee and Manmohan Singh’s strategy of economic interdependence to soften the India-Pakistan border looks like a distant dream. It is difficult to think of a peacetime period when India and Pakistan were less connected than today. New Delhi and Islamabad have exhausted the fuel that drove their engagement in the 2000s. Most of those initiatives now lie in ruin, with connectivity at a 20-year low.

The World Bank estimates India-Pakistan trade potential to be $37 billion, compared to the actual $2.4 billion in 2017-18. This has now further declined to a mere $400 million. While the world negotiates supply chains and trade deals to integrate different regions, India and Pakistan have created a commercial abyss that divides South Asia.

There has been no major investment in border infrastructure for almost 10 years since India opened its first Integrated Check Post (ICP) at Attari. There are now over 60 border crossings with northern and eastern neighbour countries, but only one formal crossing with Pakistan. Of the 23 ICPs India plans to build by 2025, none is located on the border with Pakistan.

Direct travel between both neighbours became virtually impossible even before the pandemic. The stagnation of the South Asian Association for Regional Cooperation wrecked agreements on motor vehicles connectivity and a joint satellite. Plans for an integrated power grid and energy interdependence have fizzled out, including the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline.

Pakistan seems content with this growing connectivity gap. The civilian leadership has avoided any initiative and has let the army handle India. Pakistan’s geoeconomic priority now lies towards the north and west, especially through the China-Pakistan Economic Corridor. From Islamabad’s perspective, there are few incentives to connect with India towards the east.

Pakistan’s economic disinterest and growing role as China’s proxy pose a regional challenge for India. After two failed attempts, Prime Minister Modi realised the diplomatic futility and domestic costs of reaching out to Islamabad. India’s geoeconomic focus is now on the east and south, under the Act East and Neighbourhood First policies. New Delhi’s risk-averse policy has kept Pakistan in the freezer and tried to transcend the region by investing in global and Indo-Pacific partnerships.

Ignoring or isolating Islamabad has brought some benefits, but this tactic will not work forever.

India’s rising global ambitions may get bogged down by Pakistan’s appetite to disconnect from South Asia and keep the border as hard and securitised as possible through asymmetric warfare and cyclical crises.

So what can Delhi do even if Islamabad does not reciprocate? India should explore unilateral measures that fulfil three conditions. First, the initiative must not be politically salient at home, in order to limit domestic opposition. This means following the strategic sequencing of the 2000s by not involving Kashmir.

Second, the measure should offer spillover incentives that target specific Pakistani economic constituencies, especially sectors located in the border regions and industries that would benefit from India as an export market. This includes trade, transportation and labour segments that are hurting from Islamabad’s decision to suspend trade.

Finally, any non-reciprocated initiative should be promoted diplomatically in order to place the ball in Pakistan’s court. This will expose Islamabad to international pressure and call its bluff, for example when its National Security Policy proclaims that “shared economic opportunities are the cornerstone for achieving prosperity in Pakistan and the region.”

Two unilateral initiatives satisfy these conditions. One would be for India to lower import duties on Pakistani goods. After the Pulwama attack, Delhi withdrew the Most Favoured Nation status and raised the basic customs duty to 200 per cent. Reversing this would send a clear signal, and also put the onus on Islamabad to revise its own decision to suspend trade. Trade-intensive sectors would likely mobilise to push Islamabad to reciprocate. This includes the textile industry, which constitutes Pakistan’s largest global export and was heavily dependent on cotton imports from India.

A second option is for India to unilaterally improve cross-border infrastructure. New Delhi should massively finance the development of its last-mile road, rail and air network in the peripheral border areas of Gujarat, Rajasthan and Punjab. This will not only spur domestic development but also attract attention from the Pakistani borderland economies. New ICPs could be set up along the border at Hussainiwala, Munabao, Suchetgarh or Nadabet. At the cost of approximately Rs 150 crore, each new ICP is a bargain investment in the geoeconomic future of India’s borderlands.

Trade incentives, border infrastructure or any other such unilateral initiatives are simple, low-cost ways for Delhi to reverse the lost time and rising costs of India-Pakistan disconnectivity. Even if they fail to immediately alter Pakistani behaviour, they will still help India reap the benefits of trade and mobility when the sunny day of political normalisation finally arrives.

This column first appeared in the print edition on March 31, 2022 under the title 'Let's be neighbourly'. Xavier is Fellow and Sinha is Research Associate, Centre for Social and Economic

First published on: 16-04-2022 at 04:05:19 am
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