Pakistan and India are among the developing countries of the world. Both initially followed a form of control and command economy at the time of independence in 1947 but gradually introduced liberal trade policies in response to global trends in the 1970s and 80s. Globalization and fast- moving free market economic trends in world trade forced both countries to revolutionize their trade related macroeconomic policies to meet the challenges of international competition. A brief review of the trade related economic policies of India and Pakistan follows.
The Indian government started reforming its trade policies in the 1970s to reduce the large trade deficit that had consistently appeared in previous annual budgets. It focused on four major areas of trade: industrial licensing, import licensing, export incentives and bureaucratic control. These reforms significantly altered India’s trade regime and emphasized the government’s interest in exports and displayed its determination to ensure adequate profitability
Pakistan-India Trade Policy under WTO
An exhaustive study of India’s exports in achieving steady export growth: first, incentive system be introduced; second, incentives an attractive level; third, exporters must be without the bureaucratic control that seriously and speed of response.10 A second reform process in India started incentive system had become unfeasible. Slowed down the performance of the Indian substantial damage on the Indian economy. Necessary raw materials which, in turn, interrupted of production. The administrative rigmarole large inventories to minimize potential import levels of tariffs in India were extremely high. Capital goods seriously inhibited the Indian Ataman Aksoy, an Indian economist, proposed make Indian industry more competitive. These the import licensing system that would soften inputs and components. Moreover, removal were also suggested. Quantitative restrictions to be liberalized. Lastly, and probably the the continuity, transparency and procedural policies.
India started a series of economic reforms in 1991 to cope with an acute foreign exchange crisis. These reforms aimed at liberalizing foreign investment and exchange regimes, significant reduction in tariffs and other trade barriers. The Indian policy makers introduced changes in the financial sector, including monetary and fiscal policies. These reforms resulted in real GDP growth of 6.8 per cent in 1998-99 from 5.0 per cent in the fiscal year 1997-98. Staged tariff reduction and elimination of non- tariff barriers significantly enhanced India’s trade. India further eliminated quantitative restrictions on imports of about 1,420 consumer goods on 1 April, 2003 to meet its WTO commitments.12 Former secretary Tajendra Khanna, expressed his satisfaction over the progress of
Transition of the command opined that India had reforms. This claim stood year of the reforms, dollar terms.
Broad-ranging fiscal and structural reforms in 1991 resulted in remarkable performance in terms of macroeconomic stability throughout the decade of the 1990s. India has been among the fastest growing economies in the world, with well-contained inflation and comfortable levels of balance of payments. These reforms have significantly strengthened India’s external position.
If such policies continue and India continues to head towards liberalization of trade, it shall certainly emerge as a leading actor in regional as well as international trade. Pakistan’s trade reforms Entangled with the issues of Partition, political strife, rehabilitation of refugees and scarce resources, Pakistan had to begin its economy from the very scratch. The growth of Pakistan’s economy had been disappointing in the 1950s. This situation improved significantly with the second development plan (1960-64). The compound growth rate of GNP between the terminal years (5.5 per cent) was almost twice the population growth, which was largely the result of a fixed investment strategy. In the third development plan, the rapid increase in foreign aid significantly improved foreign investment and maintained an annual compound growth rate at 5.5 per cent. A large part of the Pakistani economy was based on agriculture that needed to be modernized. Rationalization of procurement, distribution of agriculture inputs and the development of a comprehensive and effective pesticide policy were the areas of critical importance for sustainable growth in the agricultural sector.
The decade of the 1970s brought turmoil to Pakistan, and severely affected its economy. The 1971 Pakistan-India war, division of the country, oil price hike and populist measures taken by Zulfikar Ali Bhutto together affected the growth rate of this period. Bhutto’s regime
Pakistan-India Trade Policy under WTO
Left behind growth, fiscal and payments possibility of economic recovery. In 1978-79, the military government deal with the fiscal and balance of payment policy changes in this period included market-determined macro prices such Trade policies were liberalized to encourage and World Bank sponsored structural adjustment balance of payment and ameliorated the country witnessed the resurgence of the 1960s.