Pakistan approved India as their Most Favoured Nations at the federal cabinet meeting chaired by Prime Minister Yousaf Raza Gilani in Islamabad. The cabinet approved to grant MFN status to India after an extensive briefing by the federal commerce secretary. By granting the status, Pakistan intends to strengthen beneficial trade relation with India. India had already declared Pakistan as its MFN in 1996. But there was no expected improvement in the prevailing trade due to further relationship deterioration because of frequent terrorist attacks from Pakistan. But this approval can improve the Indo-Pak Bilateral Relationships very effectively.
Granting MFN will greatly influence Pakistan’s foothold in Indian market and vice versa. The decision was a direct effect of repeated requests from Industrialists in Pakistan, as they can gain a lot by entering into one of the world’s fastest growing markets. Also Pak will now allow almost all items to be imported from India rather than a handful of items. This may gain more economic benefits for India.
The issue of granting approval will most likely eradicate the long term rancour between the two nuclear armed neighbours of South East Asia. It will also reduce various fares for many goods in both the countries. Various restrictions regarding transportation will also disappear which will in turn lead to less cost in the process. Granting of MFN status has the potential to raise bilateral trade from $2.6 billion to $6-8 billion in a few years and reduce costs as many goods are routed via third countries such as Dubai to disguise the origin. Without restrictions, several goods can be delivered by road. Commerce and Industry Minister Anand Sharma said the move to grant MFN status to India will herald a "paradigm shift" in bilateral relations.
The Industrialists of both countries are already thinking about allowing bilateral investments and creating an integrated South Asian market which will include Dhaka and Colombo besides New Delhi and Islamabad. The move was strongly supported by most garment exporters in Pakistan. Various other industries expressed their support. But the Pakistan Government had to face severe resistance from militant groups and opposition as they opined to mend relation only after resolving the existing Kashmir issue. Earlier too, in 1996 when India granted MFN to Pakistan, Kashmir issue was a problem which forced Pakistan not to react. Due to the increasing economic pressure and compulsions from domestic industrialists forced Pakistan government to grant the status to India after 15 years.
The improved relation between India and Pakistan will open new vistas of world relations. After a long term ill relationship, building such a rapport could make wonders happen to both countries. If this continues to develop for political, military and technological assistance between the countries then this may make formidable power in the context of world. As also enmity with neighbouring countries is also unhealthy for both, it becomes necessary for such an alliance. It becomes more important as both are nuclear armed countries. Such cooperation can also eradicate the frequent clashes at borders and the repeated terrorist attacks.
Let us all hope that this Indo-Pak MFN relationship flourish into something more, so that they can conciliate their existing issues and set up a long lasting bilateral government, enriched with friendship and harmony to walk together in the path of progress.
Sarath C Warrier