Sun, Mar 17, 2013 - Page 4 News List

Despite tension, India eyes closer trade with Pakistan

AP, WASHINGTON

Despite a spike in tensions between South Asia’s nuclear rivals, India’s ambassador said on Friday her country wants closer trade ties with Pakistan.

New Delhi’s envoy to Washington Nirupama Rao also said that overland trade from war-battered Afghanistan to India via Pakistan would be a boon to regional stability.

Her comments at the Center for Strategic and International Studies think tank come despite a fraying in recently improved relations between the nuclear rivals that was driven by the mutual benefit they can get from more commerce.

In a reminder of the core issues that divide them, India this week accused Pakistan of involvement in a militant attack in Kashmir, the Himalayan territory they both claim and have fought two wars over. On Thursday, Pakistan’s parliament condemned India’s hanging of a Kashmiri man convicted in a terror attack New Delhi blamed on Pakistan, drawing an angry reaction from India.

Rao did not directly address the current tensions, but said whatever their differences, India and Pakistan cannot ignore that they are close neighbors. She said it was “very encouraging” that Pakistani businessmen in particular have a great desire to open trade with India. Much of the current trade goes through third-countries or illegal channels.

Pakistan announced in late 2011 that it would grant India “most favored nation” (MFN) trade status, which would reduce tariffs. That step was seen as significant as it signaled support from Pakistan’s powerful army for more trade as the troubled nation’s economy stutters. Last September, the two countries signed a visa agreement to ease travel by businesspeople and tourists.

“Pakistan has assured us that it’s going to provide MFN status to India. We are waiting for that decision to be announced formally and implemented. That will certainly boost confidence and clear the way for closer trade ties,” Rao said.

The ambassador also made a pitch for the prospect of more trade from Afghanistan, which has itself been a source of India-Pakistan dispute as the two countries have vied for influence in the region.

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