Indian actions result in cancellation of future trade

LAHORE: The impact of a 200 per cent increase in import duties by the Indian government on Pakistani products has resulted in cancelation of future bilateral trade contracts between

the two countries as almost 400 containers bound to India carrying almost 5,000 tons cement have been returned from the Wagah border.

The Indian exporters have also started terminating export deals with their Pakistani counterparts with an increase in uncertainty as hardliner Hindus are hurling threats to them if trade ties are maintained with Pakistan.

All Pakistan Cement Manufacturing Association (APCMA) Senior Vice Chairman Fareed Fazal disclosed that all future contracts with India were canceled by Indian importers after the withdrawal of the Most Favoured Nation (MSN) status to Pakistan and slapping of 200 per cent duties on Pakistani exports to India. Only few consignments crossed the border last week while the remaining were returned.

“Only at the Wagah border, almost 5,000 tons of cement exports were stopped. Similarly, some 300 to 400 containers carrying cement were stopped at the Karachi port, Fazal said, adding that India, however, did not halt the import of gypsum from Pakistan which is one of the basic raw materials for cement as the Indian cement industry is facing an acute shortage of it.

“The government of Pakistan should impose ban on the gypsum exports to India, which is being exported at through away prices,” he said. The Indian importers said the cost of Pakistani cement increased manifolds after the imposition of 200 per cent import duties and it is not competitive anymore. Thus, they canceled future cement contracts.

Pakistan has exported $60 million cement to India last year while this year, the target was $100 million. Due to the imposition of import duties, the target would not be achieved.

Fazal said the Pakistan cement industry is now eyeing to capture the Afghan market after losing the Indian market as Iran is losing its grip in Afghanistan.

Similarly, Shahzab Vohra, a trader, said both imports and exports were affected after the suspension of the MFN status. Indian businessmen are uncertain about the future. So they are canceling the contracts of various products.

Not only the trade of regular products being exported to India was affected but also imports from India witnessed decline as Indian businessmen said the hardliners do not want to maintain ties with Pakistanis.

Indo-Foreign Chamber of Commerce President BK Bajaj said businessmen regularly doing bilateral trade across the border are canceling future contracts.

“They are returning advance payments as there are no chances of resumption of trade soon,” he said, adding that temperatures will not cool down at least in next couple of months.

However, he mentioned that the IFCC has written letters to the prime minister, the home minister and the finance minister for looking into trade issues positively.

“What we can do is to raise voice and talk to the government, show our representations to the quarters concerned that we did,” he said.

On a question what is the Indian commerce ministry doing on the issue, Bajaj said the commerce ministry has nothing to do with the issue as it is related to the prime minister, the home minister and the finance minister.

He said uncertainty is growing further and business is not possible in such a scenario.

All Pakistan Textile Mills Association Secretary General Anisul Haq said Pakistan is importing both cotton and cotton yarn from India. So far no order was canceled by Pakistani importers. However, the association will discuss the issue next week if the situation further worsens. The ministry of commerce has been working on different options to react to Indian action on bilateral trade. A ministry official said the political government has to make decision on it as the ministry is calculating

the impact of different actions taken by the government of Pakistan on its economy in response to Indian action.

He said two thoughts are prevailing; one is coercive measures in which tit-for-tat response by slapping duties on some items, and the other is ignoring the Indian side.

Published by The News