Trade with India with focus on conflict resolution Abstract The idea in the back of this study is to discover the importance of trade in Pak-India peace procedure

Trade with India with focus on conflict resolution
Abstract
The idea in the back of this study is to discover the importance of trade in Pak-India peace procedure. This observation emphases that trade is instrumental in reaching and retaining peace and stability in Indian subcontinent. Financial interdependence do promotes peace stability as well as mutual economic benefits and forestall war between Pak-Indo countries, so this idea has been argued in this paper.
Moreover, keeping the trade relations between Pakistan and India in mind; Obstacles to bilateral trade exchanges, current trade statistics between these two countries, modern alternate quantitative measures should be followed for enhancing bilateral trade and its role in Pak-Indo peace maintenance and can bring peace to territorial and border disputes. It is therefore concluded that this alternate can play a tender and effective role in resolution of conflicts between Pakistan and India.

INTRODUCTION:-
Trade means the of goods and services between two persons, entity or countries.
The global market is expanding with the change in time and it is slowly moving towards the modern age. The trade and interdependence on each other and among countries irrespective of regional barrier is expanding day by day.
Many enemy countries like China and India, Germany and Japan are planning to enhance their economic relations through trade by this way they would be able to resolve the dispute conflicts among them.

Keeping this strategy mind, the proposed study gains its importance to search out for new ideas and openings of trade between Pakistan and India.

The trade relationship between Pakistan and India is very weak because of wars, reforms, Kashmir Dispute and politics. These issues are the main hurdles for the development of economic relationship. If the both sides get agree on co-operation then these relations can get better with each side agreeing to join forces and collaborate then later falling behind every other’s expectations. The countries foreign policies play an important role in determinant the trade relation between West Pakistan and Republic of India. (Noshina: 2014) the foremost Favored Nation (MFN), negative and positive lists, trade relations are moving towards the correct direction though with lots of inconsistency within the foreign policies. There are ample arguments from hardliners within the each countries and a additional thoroughgoing analysis shows that higher terms of trade can profit each nations. The India-Pakistan trade relations are of predominant importance not solely the 2 countries, however the entire of the South Asian region. There are various welfare gains related to monumental untapped trade and investment between the 2 countries. Having a typical boundary, commerce with one another is well higher in terms of come because the potential is calculable to be over multiple than that of the extent because it exists these days. Trade is definitely one among the foremost vital pragmatic measures for chemical process bilateral ties. Even though trade between 2 states has increased within the last few years about, it’s still off from what’s required. The trade volume of Asian country and India has averaged but $ one billion until a pair of 2005 and fewer than 2 billion until 2012. Keeping in mind the extent of their international volumes of trade, details purpose to the low trade volume within the middle of the 2 nations – initial, neither nation comes within the cluster of the very best commercialism associates for every other; and resultant, share of India in trade of Asian country averaged underneath 3% and share of Pakistan trade of India averaged below 2%
India and Pakistan are the two largest economies on SAARC, so being dominant constituents in SAARC both the countries have great potential to have trade between them. India-Pakistan trade relations are of very much importance not only the two countries, but for the whole of the South Asian region.
Basically three types of trades occurs between Pakistan and India
The formal/legal Trade: – that takes place through official and means and that is marginal.

The informal/illegal Trade: – that occurs through smuggling via porous borders shared by both countries or via Afghanistan.

Third party Trade: – that occurs through other countries mainly via Dubai or Singapore.

Historical backgrounds of conflicts: –
From the beginning when both countries Pakistan and India came into being in 1947, a long term war or conflict has been witnessed between them. Frequent wars, violations on LOC, spying on each other’s embassy members are factors of pak-indo history.

Since the origin of Republic of India and Pakistan as freelance states, a protracted term confrontation has been witnessed between 2 nations. for nearly six decades the region has witnessed four major armed conflicts (1948, 1965, 1971 and 1999) between each countries. Frequent violation at Line of management, allegation of spying and fury on embassy employees at either side are the a number of the outstanding evidences of antipathy between the 2 nations. Throughout the history, 2 nations remained during a continuous conflict and have restricted bilateral relations .Despite varied efforts the 2 states didn’t resolve their variations amicably. Similar scenario is perceptible within the context of trade relations between Bharat and Pakistan. each the countries have troubled log because of political and armed conflicts. As a results of partition between Republic of India and Pakistan, the unified economy of sub- continent was divided. once British government degraded its currency in 1949, {india|India|Republic of Republic of India|Bharat|Asian country|Asian nation} conjointly followed the identical however {pakistan|Pakistan|Islamic Republic of Pakistan|West Pakistan|Asian country|Asian nation} refused to try to to this follow resultantly India got aggravated and commenced curbs on trade with Pakistan. By the tip of 1949 and at the start of Fifties trade relations were suspended however when one year in 1951 Republic of India accepted value of Pakistan’s currency and agreement of trade was revived between 2 nations. (Noshin 2014).
Both countries visited war over the geographic region issue on vi Sept 1965. This seventeen day war all over when the UNSC issued a resolution career each parties for a armistice. Republic of India accepted the resolution on Sept twenty one, 1965 .The next day Pakistan followed suited. On Gregorian calendar month ten, 1966, the 2 parties, signed the Taskent Agreement, brokered by the Union of Soviet Socialist Republics. The declaration stressed that “both sides can exert all efforts to form smart friendly relations between Pakistan and Republic of India in accordance with the UN Charter. They reaffirmed their obligations below the Charter to not have recourse to force and to settle their disputes through peaceful means that.( Maria, 2006:78).Due to the war of 1965, trade relations were once more suspended between 2 nations however later in 1966-67 the leaders of each countries by language the Taskent written agreement reopened the avenues of economic relation; although the scope of this bilateral tie was restricted at that moment.
The Third Indo-Pak war reworked the regional balance of power and compact upon the 2 countries, approaches toward their bilateral relation. Simla agreement was signed by Republic of India and Pakistan on Gregorian calendar month a pair of, 1972, to settle some matters associated with the 1971 war. This agreement provided the 2 countries a group of tips for his or her future bilateral relations. 3 years later, in Gregorian calendar month 1975 a full-fledged trade agreement was signed by each nations and railway corridors were conjointly opened. Relations between Republic of India and Pakistan showed sturdy sign of improvement once in Gregorian calendar month 1999, once Atal Behari Vajpayee ,Prime Minister of Republic of India, visited Pakistan so as to gap of the Lahore-Delhi transportation company. This visit was a response of an invite by Nawaz Sharif, the Prime Minister of Pakistan. At this meeting that gave the look of a breakthrough, the 2 Prime Ministers mentioned all facet of bilateral, regional additionally as international problems. The leader of each countries signed the city Declaration that expressed their shared vision of, prosperity peace and progress for his or her folks. the 2 sides conjointly united to create a lot of serious efforts to unravel all bilateral queries as well as trade and geographic region ,through dialogue and agree to not interfere in every other’s internal matters. However, before long when the happening of fighting in Kargil in 1999, interrupted the harmony of relations and trade relations were once more suspended. (Effendi Maria 2006:78)
The new international atmosphere that emerged when 9/11 additional difficult each Republic of India and Pakistan’s relations. The ever-changing tendencies were found in relations of each countries in initial decade of twenty initial century however international trade remained insignificant. matters within the landmass was modified in 2003, when Mr. Vajpayee proclaimed that Republic of India would upgrade its diplomatic illustration in Islamabad to the extent of diplomat and restore air links with Pakistan on a reciprocal basis. So, Indo -Pakistan relations began to enhance and there have been exchanges of official visits and different confidence-building measures. In late November, Republic of India accepted Pakistan’s supply of a armistice on their shared border in geographical region, so ending the constant exchange of fire there for the primary time in fourteen years. throughout year 2004-08 trade dialogue was once more taken place and trade was reinstated. There was intense behind the scenes diplomacy during which several necessary powers participated and countries friendly ironed each aspect to require major steps to remove the tense state of affairs. Thus Mr. Vajpayee visited capital of Pakistan within the initial week of Gregorian calendar month 2004 to participate within the twelfth SAARC conference. in a very joint statement, the 2 countries in agreement to start a composite dialogue method and in agreement to taken steps so as to enhance political and economic relations. so there was a serious breakthrough in Pakistan-India relations that sped up the social control method. once this vital summit, the 2 countries began moving ahead with peace initiatives through totally different confidence building measures (CBM) together with intra-Kashmir bus and truck services, the gap of crossing points on the road of management (LOC), mitigated visa restrictions, economic and business cooperation; and promotion of friendly exchanges. These CBMs remodeled the political atmosphere within the region providing a singular chance to each countries to resolve their dispute. (Farmer 2014 ).To enhance the cooperation in trade , Republic of India and West Pakistan signed trade agreement South Asian trade space (SAFTA) to switch SAARC discriminatory commercialism arrangement (SAPTA) in Gregorian calendar month 2004 at twelfth summit (Islamabad) The SAFTA was enter in to force in 2006. The written agreement provided the episodic elimination of tariffs: these were to be reduced to thirtieth in least developed member’s countries and to twenty within the others within the initial biennial amount, and after to 0-5% within the next 5 years. The Agreement established a mechanism for administering SAFTA and for sinking disputes at ministerial level. (Article three of SAFTA).
Four rounds of trade talks were control between the 2 countries, from 2004 to 2007, that aimed to strengthen economic ties. In 2008, either side in agreement associate degree agreement ought to be finalized for liberalizing their visa regime that may facilitate people-to-people contacts. there have been some enhancements within the atmospheric static between the 2 countries as a results of composite dialogue. Bilateral trade has improved. travel bus and train between the 2 countries became a lot of organized and frequent. Bilateral relations of each countries gave the impression to get on the course towards social control. However, the urban center Attacks were a major mischance of the growing understanding between the 2 nations.(Daily Dawn) Despite West Pakistan’s protestation that those concerned within the urban center attacks were non-state actors and that the government of Pakistan was irreproachable during this regard, the urban center attacks caused a severe reverse to indo-Pak relations. the arrogance building measures and different initiatives for bring a permanent peace to the landmass gave the impression to are vainly. The Indian government reacted severely to the incident. It stopped all trade ties with capital of Pakistan, the secretary level talks on necessary matters like policy, commerce, sure clauses in Simla agreement, and disputes within the water sharing written agreement were shelve indefinitely. These relations were quickly suspended in 2008 once urban center attacks however now some trade continuing despite the conflict. Indo-Pakistan relations, in post urban center attacks, came to rock bottom purpose however once the lapse of 3 years diplomatic ties in early 2011 were reestablished. Improved trade relations were witnessed in March 2011 once revival of West Pakistan Republic of India dialogue. One in all the explanations might be economic process that promoted regional co-operation on economic grounds within the region. Bilateral trade was initiated by business communities at either side in spite of the present conflicts. In 2011, finally once a fifth spherical of talks, selections were taken to end the negative back to the favour of a positive list. The Chambers of Commerce from each countries were joined along and therefore the Commerce Minister of West Pakistan visited his Indian counterpart once a niche of thirty five years, leading to a come visit by the Indian Commerce Minister in Feb of 2012. By realizing the activity of bilateral relations each countries are currently at the move to enhance economic relations with one another. Republic of India and West Pakistan reciprocally set to join forces in customs cooperation and joint recognition of standards in 2012.

Current statistics of formal trade between India and Pakistan : –
As explained above presently, trade between Pakistan and Republic of India is going down through 2 channels. (State Bank of Islamic Republic of Pakistan, 2006).The formal trade, that takes place through official means; informal or misappropriated trade through importing via porous Indo-Pak land borders and third through third countries. the primary channel that is that the formal one – is sort of meager as a result of the present volume is simply $ two.7 billion.However, the dimensions of informal trade and trade via third countries is around $ 8-10 billion per the statistics given by completely different reports. the quantity of informal and third country trade indicates the tremendous potential for bilateral trade between the 2 countries. If Islamic Republic of Pakistan and Republic of India normalize their economic relations can enhance the formal trade and as a result each the countries will earn vital revenue, that is lost thanks to informal trade. Formal trade also will guarantee cheaper raw materials, lower transportation prices and wider markets for the businessmen. These measures can profit the shoppers of each the countries. Increase in formal trade can facilitate economies of each the countries in terms of revenue assortment, exports of products and lower prices. the upper volume of formal trade can increase economic dependence of Islamic Republic of Pakistan and Republic of India on one another. Resultantly, each governments are compelled to normalize their political relations associated resolve their border disputes in an peaceful manner. Increase in bilateral trade will facilitate in breakdown the political problems and reducing financial condition. it’s required to be completed that bilateral trade can act as a forced number therefore each the governments ought to consider creating efforts for promoting two-way trade. Neighboring countries might have variations over one issue or another however higher economic cooperation and trade activities will remodel their facet of political relations. Bilateral trade are often instrumental in removing misperceptions between the folks of Islamic Republic of Pakistan and Republic of India additionally. they have to open additional trade routes as a result of the present trade volume is far below the specified one. Trade is going down via third channel and so each the countries have to facilitate direct interchange order to realize win-win results.

Existing trade policy of Pakistan with India : –
Pakistan’s overall commerce policy aims at liberalizing the trade regime so as to integrate its economy into the world trading system, sustaining growth in exports and getting ready for a modified international trade situation with the phasing out of textile quotas by 2005. during this association, important efforts are created throughout the Nineties. the most customs tariff rate on imports, that was 225 % in 1990-91, was bit by bit brought right down to thirty % in 2000-01. it had been any scaled right down to twenty {five} % within the Federal Budget 2002-03 whereas the amount of tariff slabs were additionally reduced from five to four, i.e. 25 percent, 20 percent, ten % and five %.11 The national trading policy for FY05 envisaged a multi-dimensional effort with attention to any liberalize and boost exports through larger volumes of sales covering a wider base of added product and increased productivity. this can be supported by providing incentives for the planned special economic zones within the country. national trading policy with Asian nation is being pursued on the idea of the opportunities and threats expected to emerge by trade alleviation between the 2 countries. visible of its domestic industrial base, Islamic Republic of Pakistan has adopted a aware strategy to bit by bit open trade with Asian nation notably in sectors within which it’s not thus competitive. In 1983, associate India-Pakistan Joint Commission was fashioned that formally legal associate agreement to foster bigger bilateral cooperation within the economic, industrial and industrial fields. As a result, forty things were allowed for import from Asian nation by the non-public sector, that were later redoubled to 584 things. whereas Islamic Republic of Pakistan permits all types of exports to Asian nation, it had maintained a positive list of 687 items12 in 2004-05, that were formally importable from Asian nation. In pursuance of SAPTA negotiations, the positive list of importable things was distended by eighty one things to a complete of 768 things 13(these things correspond to around 1650 things at 8-digit level) and any to 773 things. Most of the new things enclosed within the positive list are within the nature of stuff and chemical things needed by the native trade. things not coated within the list aren’t permissible for import from Asian nation. On the opposite hand, Asian nation doesn’t impose equivalent formal restrictions on exports to or imports from Islamic Republic of Pakistan, however alternative restrictions (e.g. on travel, remittances, customs clearance) are typically believed to possess an analogous impact, particularly as regards imports.14 so as to shield domestic industries in Asian nation, the Indian Ministry of Commerce maintains a listing of “Sensitive” goods, imports of that has been frequently monitored with a read to require prompt action to preempt or minimize disruption of native production by competitive imports. merchandise are sporadically off from or added to the list: in Gregorian calendar month 2004, it consisted of 240 HS merchandise. Domestic production of the many of those merchandise is protected by special measures, together with high tariffs and additionally by the employment of assorted non-tariff techniques. To be sold in Asian nation concerning 159 merchandise are needed to be certified as meeting Indian quality commonplaces associated should acquire an Indian standard mark. Since the institution of the South Asian advantageous Trade Arrangement (SAPTA), Islamic Republic of Pakistan and Asian nation have affected bit by bit towards liberalizing trade with one another. each the countries have provided important relief to every alternative in terms of tariff concessions throughout the fourth bilateral meeting remained Dec three, 2003 underneath the horizon of SAPTA. Islamic Republic of Pakistan extended concessions to Asian nation on 223 things, up to ten % on the tariff rates for 2003-04, apart from seven things wherever the depth of concession is twenty %. the present tariff on most of those things ranges between an occasional of 5-20 % (except twenty five % on four and thirty % on 2 items). the full variety {of things|of things} on that Islamic Republic of Pakistan has thus far given concession to Asian nation has been extended to around 463 items.15 Asian nation gave Islamic Republic of Pakistan concessions within the vary of ten % to twenty five % on tariff rates on 262 things. the present tariff on most these things ranges between 20-30 % (except ten % on solely four items), that are considerably over the tariff rates offered by Islamic Republic of Pakistan. Trade between Islamic Republic of Pakistan and Asian nation are going to be any liberalized once SAFTA can inherit force from Jan one, 2006. underneath the in agreement trade alleviation program, Islamic Republic of Pakistan and Asian nation can scale down tariff rates from twenty five % to twenty % inside a timeframe of 2 years.

Trade as a sign of peace: –
Trade promotes peace, reduces conflict and accelerates the economic activities. The low volume of trade between Pakistan and India is due their territorial and border disputes. If bilateral trade is accrued the mutual economic edges also will increase and so it’d discourage cross border terrorist act and violence. Economic mutuality promotes peace and tranquility as a result of conflict is inconsistent with mutualist economic ties. Improved trade relations and rise in import and export between Pakistan and India can cut back the likelihood of cross border skirmishes. The high export and import flows in economic sectors influence the choice to initiate a military conflict. The institutions or competent authorities of each, in Islamabad and Indian capital can should think {about|contemplate|take into account} about the chance prices of conflict which could cause losses in trade. The political leaders and policymakers of each countries have to rethink the logic of however trade affects conflict, and has numerous political implications. In fact, trade facilitates dialogue over some political and border problems and may he used as a tool which will influence choices of the leaders on the territorial disputes like geographical area, Sir Creek and may produce a cordial atmosphere required to require new initiatives. Countries that have permanent trade relations with one another don’t go for competition and if a political conflict arises between them, they solve it in associate well-meaning manner. however this truth has not been accomplished by the governments and political leaders of Pakistan and india.
Closer economic cooperation between Pakistan and india is important for increasing the trade volume. it’s a general read that higher economic relations between the 2 countries are marred by the territorial disputes and cross-border terrorist act and thus trade cannot play a job in up bilateral relations. This argument is proven wrong. In recent history the political conflicts and worst relations among states are normalized through larger economic cooperation and trade. There are many examples worldwide –The international organisation and association electroshock -where trade and economic cooperation has vie a serious role in conflict resolution between close countries. the Congress licensed designation of qualifying industrial zones (QIZs) between Israel and Jordan in 1999 and Israel and Egypt in 2004.4 The QIZs permit Jordan and Egypt to export to the North American country exempt if the merchandise contain a minimum level of inputs from Israel.5 This trade initiative was aimed toward supporting peace and stability within the region by encouraging economic cooperation. it’s worked well. Since each india and Pakistan don’t seem to be on smart terms it’d be wise to incorporate QIZ-type of arrangement in a number of their agreements significantly with the EU, the North American country and China and even at intervals SAFTA. Such arrangements would facilitate boost each Indian and Pakistani economies moreover because the method of peace negotiations. The institution of the ecu Union (EU) effectively united the Continent that for long was divided and militant. The EU has light-emitting diode to higher levels of economic well-being ensuing from increased economic cooperation amongst the member states. History provides ample examples that no neighboring countries have ever survived and progressed on prolonged belligerent relations. business relations will function a method to enhance of political relations and maintenance of peace and stability. Each India and Pakistan face hurdles in their method towards peace building. The trade and economic cooperation between them will cut back tensions and distrust and may ultimately bring peace and tranquility to the entire region.

Why trade with India: –
At a extremely disaggregated level it had been found that there are a pair of,646 common things of Pakistan’s imports that Republic of India exports price over $15 billion. For 1/2 these things, the unit worth of Pakistani imports is over the unit worth of Indian exports. Pakistan will import these things cheaply from Republic of India. At the identical time one,181 things price $3.9 billion are common between India’s imports and Pakistan’s exports. concerning seventy % of those common things have unit worths less or capable the Indian import unit value. this means that these exports from Pakistan are often equipped to Republic of India at a lower price than what they’re obtaining from alternative countries (Dr Ishrat Husain, 2011)
It ought to even be unbroken in mind that bilateral balance of trade with any specific country doesn’t must be positive. There would be no trade that case. Pakistan would run a deficit with Republic of India even as it will with China and surpluses with others. Republic of India may be a larger, additional heterogeneous economy and conjointly produces product that Pakistan exports. The determinative issue is whether or not the price of imports from Republic of India is a smaller amount than comparable quality imports from alternative sources
Barriers to trade between Pakistan and India: –
Politically India and Pakistan are perceived arch rival within the region. Since independence, bilateral economic relation has been adversely established by political factors. With a vision to boost peace and prosperity to flourish within the region, the 2 countries are currently progressing toward an in depth economic relation realizing the synergism of bilateral potential. the problem of {pakistan|Pakistan|Islamic Republic of Pakistan|West Pakistan|Asian country|Asian nation} granting {india|India|Republic of India|Bharat|Asian country|Asian nation} Most favorite Nation’ standing has long been attention of trade talks between India and Pakistan and. (Ankit Panda 2014) Pakistan and India are the members of World Trade organization (WTO). Besides this each countries were among the signatories to the overall Agreement on Tariffs and Trade (GATT), the forerunner of the international organisation. (Imam A H. 2011).The border disputes and political conflicts prevented each countries from fulfilling their United Nations agency obligations. India finally granted Pakistan the MFN standing in 1996 underneath the international organisation agreement, however Pakistan has failing in reciprocal it to date however however the ‘positive list’ things are magnified in 2006 and so a lot of recently in 2013. It presently includes virtually a pair of,000 items. (Taneja N. 2007)
It is rumored that Pak-India informal trade (which occur through a 3rd country) accounts for quite formal trade (which is around US$4 billion).23Despite Pakistan’s recent rejection of MFN standing to India, the latter will unilaterally cut back all types of non-tariff barriers which will be capable in making confidence among Pakistani traders. higher trade relations among nations facilitate them in up political relationship. A case in purpose is that the robust economic relations between China and Japan, that assist them in helpful unsteady political relations. (Mohanty B ;amp;Hazary S C 1997). Giving the MFN standing to India might result in bigger economic cooperation between the 2 states which might facilitate them within the long term, notably, in building the trust deficit required in partitioning the territorial disputes. during this time, Pakistani government proclaimed to open up exchange 6800 areas that were antecedently illegal. within the same year, visa policies were additionally relaxed by each governments. A mutual agreement was created to versatile the business travel so as to enhance economic partnership (Siddique, 2013). national capital mustn’t be disturbed regarding granting the foremost favorite nation (MFN) standing to India as one,936 product are already being foreign from the neighboring country (Qamar A.2005).Furthermore Islamic Republic of Pakistan will forge joint ventures with Indian corporations in info Technology sector. increased trade with India won’t solely reduce the pressure of escalating inflation in Islamic Republic of Pakistan, however the political conflicts in addition. this might facilitate each the countries not solely in strengthening their economies, but, a lot of significantly, associate improved trade relationship may finally bring an enduring peace and prosperity within the region. Presently, Islamic Republic of Pakistan is commerce around $10 billion product from India out of that $4 billion merchandise are foreign via third countries. (Achrya L ;amp;Marwaha A 2012).If the MFN standing is granted to India, a lot of direct trade links are going to be established thus a lot of revenue are often generated and this economic cooperation between the 2 countries can result in promotion of regional exchange the South Asia. In fact, the long run of the full region depends on the link between 2 major players. Escalating tensions between India and Islamic Republic of Pakistan have invariably vulnerable peace within the sub-continent; thence each countries have to improve their economic relations in order that regional peace and security are often maintained. additionally to political negotiations, economic diplomacy is additionally needed to shift the priorities and accomplish the objectives that are necessary for regional stability. Major breakthrough each on political and economic fronts have to be obtained. doubtless, the economic cooperation could be a should to create south Asia a tension-free zone. Economic activities will contribute to an oversized extent towards regional integration. the link between Islamic Republic of Pakistan and India has remained turbulent, however vital to peace within the region. Territorial and border disputes like Jammu and Kashmir, Siachin, Sir Creek, water dispute, terrorist act etc have to be mentioned and robust trade ties will pave the way for the peaceful resolution of of these disputes. (Hindustan times 2014) in line with the Indian Minister Commerce and business ,Sitharaman, “Progress in trade social control would depend upon the choice taken by Islamic Republic of Pakistan with relation to granting MFN standing to India,” if MFN standing is granted to India by Islamic Republic of Pakistan, it might facilitate direct bilateral trade and result in “economic gains for each countries”.(The Daily Nation Dec 2014)
There is no country within the world that is self-sufficing and produces all the commodities it wants. The developed countries export shopper and industrial product to the developing world and import raw materials from them. Textile business are often termed because the backbone of Pakistan’s economy. it’s one in every of the most important sources of interchange earnings. The Textile sector principally depends on the availability of stuff from agriculture sector and thus, no matter happens to cotton crop is probably going to have an effect on the performance of the textile sector. the dimensions of the cotton crop has invariably remained on the upper scale in Islamic Republic of Pakistan. The textile business provides employment to thirty eight per cent of the labour force of the country. India might become the most important marketplace for Pakistani textile business. moreover, Islamic Republic of Pakistan is additionally a number one producer and bourgeois of animal skin merchandise. once more India isn’t within the list of the leading commerce countries of Pakistani animal skin merchandise because of numerous trade barriers. Islamic Republic of Pakistan has the best per capita consumption of tea within the world and it imports tea principally from Kenya.Pakistan imports iron, wheat and sugar from Australia, us and Dutch East Indies. Similarly, Islamic Republic of Pakistan imports vehicles and spare components, pharmaceutical merchandise from countries aside from India.12It exports raw cotton, Carpets and rugs, Tents, sports product, readymade clothes to alternative countries. (Import and Export of Islamic Republic of Pakistan 2013)
Pathetically India isn’t on the highest of the trade partner list, either as associate exporter/ businessperson because of numerous constraints. as an example, {pakistan|Pakistan|Islamic Republic of Islamic Republic of Pakistan|West Pakistan|Asian country|Asian nation} has not however reciprocated the MFN standing to {india|India|Republic of India|Bharat|Asian country|Asian nation} though the latter has dilated the positive list (of goods) that India might export to Pakistan. On the opposite hand, India’s tariff rates stay high on textiles and animal skin product. Moreover, nontariff barriers are substantial. Poor transportation, visas constraints and cumbersome payments and customs procedures limit the scope for trade between the 2 countries. it’s been argued that electoral politics in each countries —have additionally remained major obstacles within the
way of bigger economic cooperation. (Khan,S,R 2008) however the recent thaw in bilateral relations suggests that the 2 governments perceive that they will now not forgo stronger economic ties. The border disputes between Islamic Republic of Pakistan and India will solely be resolved by developing trust and connections between them. Trade are often instrumental during this regard. Studies recommend if restrictions are decreased and trade between India and Islamic Republic of Pakistan is allowed to flourish, a pathway towards peace would mechanically develop. Not solely the employees, businessmen, investors and firms, the direct beneficiaries of trade, would pressurize politicians to keep up cordial and bilateral relations however the mutual economic edges would additionally compel each the states to keep up cross border peace. Therefore, the 2 governments ought to create trade their high priority.It is within the mutual interest of Islamic Republic of Pakistan and India to try for an everlasting bilateral relationship. the development in trade ties between the 2 countries won’t solely lead to economic growht however also will be useful in up regional stability and peace. Despite political conflicts, trade enlargement between India-China, China-Taiwan, US-China, and US- Russia illustrate that economic cooperation is an efficient instrument in up interstate relations. Islamic Republic of Pakistan and India will establish a trade relationship that may pave the way for partitioning political and border disputes, together with Jammu and Kashmir, between the 2 very long time nuclear-armed rivals.

Non-Tarrif Barriers: –
Regardless of the actual fact that each countries having liberalized their import regimes, Pakistan continues to follow a positive list approach towards Indian imports
Following could be a temporary description of non-tariff barriers faced by Pakistani traders towards India.
1. Lack of Land Trade Facilitation
a) inconvenience of infrastructure like rail wagons, sheds, X-rays machines etc.
b) Restrictions on loading train through Sindh route will increase large amounts to be paid as ocean Freight to the shipping lines. It additionally takes nearly ten days of loading and unloading. mistreatment Sindh route will cut back the cost also as time up to twenty four hours.
c) restricted no of things are listed via road route and lack of deposit and cold storage facility at on either aspect of the boarder.
2. Technical Barriers To Trade a. Strict Indian certification needs by the bureau of Indian standards particularly for textile vegetables and cement b. Multiplicity of normal setting bodies (24, as an example export examination council, Indian institute of foreign trade, Indian institute of packaging, artifact boards etc.) creates confusion. c. Multiplicity of rules and rules d. No single publication that cowl info on tariffs , fees, taxes and legislation creating whole system time overwhelming, cumbersome and ambiguous. e. person of BIS license should pay process charges expenses of the examination visit, testing price, annual marking fee for the license and license tax should be paid severally f. License issued for any product valid for one year.

Non-Transparent Administrative Policies Of Government: –
\\\\\Lack of transparency, market imperfections and knowledge asymmetries on each side raise group action prices and limit market access for many alternative aspiring traders. Even the Indian importers are haunted by the law-enforcement agencies for his or her trade ties with Pakistan. Pakistan has AN export interest in textiles, cement, food, jute, and alternative agricultural product that additionally happen to be sectors wherever import restrictions/standards are most strictly applied by India.
For Example:
Pakistan is in an exceedingly position to promote its textiles in India however the strict conditions arranged down below the Textiles (Consumer Protection) Regulation of 1988, are a significant barrier.
Pakistani material exporters are needed to get a pre-shipment certificate from a textile testing laboratory in Pakistan certifying non-use of risky dyes. In some cases even the EU authorized labs are rejected by Indian customs creating zero rate exports not possible.
? Cement exports to India from Pakistan have reduced from 60,000 tones monthly average to a mere 15,000 tones primarily because of the delay in renewal of quality certification by BIS.
? Pakistan jute has potential in India however Indian government tenders are restricted to native makers.
? interchange energy and IT and repair is heavily restricted
? No foreign direct investment between the 2 countries.

Lack of Adequate Banking Relations: Some Indian banks don’t acknowledge L/Cs from all Pakistani banks and also the confirmation of L/C’s could take a month. there’s no formal mechanism for the settlement of disputes. Indians banks don’t seem to be allowed to possess branches in India additionally Pakistan has no branches.

Visa Restrictions: –
It is also found that because of a restrictive visa regime solely chosen traders have access to trade- related information; Visas are to be obtained just for specific cities before entry into Pakistan.
Trade Logistics: –
Road routes for trade are nearly non-existent, rail and air property between the 2 countries has been inconsistent that’s still a barrier in bilateral trade.
Strict Security Checks: – Pakistani consignments are subject to additional rigorous checking and careful security checks in Republic of India (e.g. Pakistani sirup is allowed in one ton packs solely due to security reasons). The Indians this year took Pakistan-specific measures to deprive its trade of 1 million cotton bales.
Strict Customs Clearance: – Excessive checks on security grounds. merchandise is also delayed for many days before they’re cleared. foodstuff must be named port health officers, the inconvenience of at varied ports needs check from food central laboratories. Delays in such could have an effect on the putrefiable food things and are sometimes common. Earlier packed food materials were free on the premise of health certificates issued by the countries of origin. the products detained for while ends up in serious damages similarly as port charges.

Conclusion: –
Trade between nations directly contributes to peace and tranquility. Trade creates an economic interest between nations and develops contacts between individuals that facilitate them in sympathy. Countries are less possible to involve during a war if they need mutual economic advantages. strong economic ties between Asian country and India are essential for the peaceful resolution of the territorial disputes. it’s true that conflicts have hampered Pak-India bilateral trade however it’s also equally true that additional trade are going to be a big confidence building live which can facilitate peace and scale back tension. Pak-India mutual trade will be promoted and increased by taking some major steps as well as
a) elimination of non-tariff barriers to trade;
b) facilitation of the cross- border movement of goods;
c) promotion of conditions of truthful competition and equitable benefits;
d) creation of effective mechanism for the implementation and application of the agreement;
e) simplification of customs clearance procedure and banking procedures for import finance.
Moreover, development of communication systems and transport infrastructure; simplification of procedures for business visas and institution of a framework also will facilitate the economic cooperation. aside from that there is a dire would like of drawing a rigorous framework for trade that should be developed independent of any political pressure.Both the countries have to discuss a roadmap for removing bottlenecks in relaxation of bilateral trade and to get rid of all hurdles within the trade relations. Indian government has to address issues of community in Pakistan concerning non-tariff barriers and different problems that impact export of products.Hence, improved trade relations between Pakistan and India are inevitable for stability and therefore security within the Sub-continent.
Notwithstanding, these positive changes together with, many hurdles still exist because of political variations between the 2 countries. Some policy manufacturers in Pakistan insist that unless the territorial disputes between 2 countries are resolved, trade and economic cooperation can stay low. However, this can be not the case. A relationship that relies on trust and temperament and is backed by economic and business links will pave the way forward within the name of peace and prosperity. Enhancing mutual trade won’t solely bring advantages to the full region however also will prove a key determinant for lasting relations between the 2 neighbours. It is, therefore, all over that trade will play a soft and positive role in conflict resolution between the 2 long standing adversaries.

Recommendations:-
The most necessary recommendation pertains to easing visa restrictions in order that trade is administered in a very freer surroundings. A liberal visa regime would serve as a good channel for info exchange on trade connected matters between the 2 countries.
? additionally rail and road routes should be spread out whereas the present capacities on operational routes must be enlarged.
? permitting branches of Indian and Pakistani banks to work within the alternative country. Banking facilities must be improved and facilitated in each countries through acceptable institutional mechanisms.
? Land routes for trade should be opened. Pakistan ;amp; India should Encourage bilateral trade through road and ocean routes to avoid wasting large transportation charges that they bear on foreign from alternative countries.
? Custom and Police Inquiries are a giant hurdle that waste valuable time, it should be created easier and exempted for business delegations.
? One window operations should be enforced in each countries for trade visits facilitation.
? There should be a good collaboration between Chamber of commerce of nations and visits/delegations similarly as trade fairs should be inspired by each countries. ? India and Pakistan should produce adequate testing facilities at the land borders so no trade restrictions are imposed on the bottom that testing facilities aren’t accessible.