‘Liberalise visa regime for businessmen to travel freely’

‘Liberalise visa regime for businessmen to travel freely’ Dr Rajiv Kumar Secretary General – FICCI The Asian Age, New Delhi, November 6, 2011-Interview by PAWAN BALI Upbeat about the potential benefits of Pakistan granting India Most Favoured Nation trading status, FICCI secretary-general Rajiv Kumar tells Pawan Bali that trust will grow with trade, and after that ‘everything is possible’ in India-Pakistan ties How significant will be the prospects of Pakistan extending the Most Favoured Nation (MFN) trading status to India, 15 years after India offered Pakistan that treatment? Which sectors in particular will be impacted in the two-way exchange of goods, and what is the overall outlook likely to be? The answer is in two parts. One is what is already happening. The second is that a lot of opportunity will open up once the bilateral trade is normalised. There is a lot of trade happening via Dubai at the moment. And our products that go there — mind you, this is not allowed — are tyres, auto component, pharmaceuticals, engineering products, pan masala, even pans, chemicals and some textiles. So these are the sectors which will benefit from our side. From their side it is cement which is already coming, fruits and vegetables, cotton, some specialised textiles, and may be sports items. Pakistan has a very developed sports industry around Sialkot. These are the existing sectors. What I expect is that once your trade is freely allowed, a lot of MNCs will set up their plants to serve both markets. This is an example of what is called intra-industry trade. One other thing that will happen is the export of petroleum products from India to Pakistan. A new refinery of Lakshmi Mittal is coming up in Bhatinda in association with Hindustan Petroleum Corporation. They will be able to supply a large amount of petroleum products to northern Pakistan, their Punjab. These commodities then need not make their way up from faraway Karachi. I see that there will be a huge expansion of new opportunity. You didn’t mention the movies! Everyone see Bollywood films in Pakistan — all smuggled, of course. They are not allowed even to exhibit our movies. Pakistan has very good TV plays. Media and entertainment will be a major area of expansion.

There is some concern in Pakistan that their local industry will be hit by a surge in exports from India? Their fears are justified, just as there have been fears in our case. Remember the time when we were signing the free trade agreement (FTA) with the Asean. Many worried that our edible oil industry will be finished, that our rubber industry will be finished. With MFN status on, you can always have a negative list — they may not allow imports of some particular products to begin with until the impact becomes clear. Thus, their fears can be easily taken care of. What are the likely ripple effects of an easier trading regime for both economies? There will be tremendous impact. What the Pakistan Cabinet has cleared is a normalisation of economic relationship with India. Pakistan commerce secretary, Zafar Mehmood. said that they have cleared the idea of liberalising both trade and investment. If this materialises, we for our part can take the necessary steps. What are these steps? One is to liberalise the visa regime so that business people can travel freely. Second, to remove our non-tariff barrier. For example, they have got wonderful mangoes which they want to export. But if you put it through all the testing and the labs, the mangoes will rot before they arrive. If we take the required helpful steps, then I am convinced that we have a huge multiplier effect. Our investors will go there, theirs will come here. That is one part. The second part — for which there exists potential — is that we will get connected to Central Asia. If our goods are permitted to transit through Pakis-tan, then all of Punjab gains. Right now it suffers from being landlocked. Our Punjab is several thousand kilometres away from sea ports, but our Punjab and Haryana farmers will be able to send goods to Central Asia if these are allowed through Pakistan. Our Ludhiana textiles can also go to Central Asia. So there are large implications worth looking at, that will favourably impact Himachal Pradesh, Punjab, Haryana and north Rajasthan. India gave MFN status to Pakistan in 1996. What was the effect of that? Nothing. In effect, MFN was not in operation as both side had not granted it reciprocally. You have written that this MFN status will help in the implementation of the Turkme-nistan-Afghanistan-Pakistan-India (TAPI) pipeline. What about the Iran-Pakistan-India (IPI) pipeline? The IPI pipeline seems more difficult. This is because the Iranians are very tough negotiators and they have been negotiating for a long time. Also, there might be a problem with the Americans. But for TAPI, the right environment has been created. This will bring the much-needed gas to Pakistan and India. What should India now do to facilitate trade with Pakistan? More than infrastructure, we should now liberalise the visa regime, especially for business people. Pakistan businessmen should get multiple-entry and free visas. In the case of India and Pakistan — and this happens nowhere else in the world — people only get city-specific visas. So if you give a visa only for Delhi, a business individual can’t go to Gurgaon or Noida. On the physical infrastructure side, the Wagah border-control facilities have to be greatly expanded. Basically get big and sophisticated X-ray machines through which trucks can pass. Warehousing is needed at Attari. There should be several train stations. On the Line of Control (LoC) in J&K also, they should enhance the infrastructure. If the visa regime is liberalised, is there potential for increase in religious tourism? From our side, I am sure at least 20-30 million Sikhs would like to go to Pakistan. I have been to Nankana Sahib, and it is amazing. From their side people would like to come to Ajmer and other places. The potential is huge. Do you see the potential for Indian companies to invest in Pakistan, say set up a steel plant? Much later. I see that the biggest thing that will happen because of the two-way MFN is the growing of trust as trade gets going. After that everything is possible.