All Eyes on Negative List As Commerce Minister Anand Sharma Leads Team to Pakistan Close.

NEW DELHI: India is apprehensive that Pakistan will not allow import of automobiles, pharmaceuticals and textiles when it shifts to a more liberal trade regime with its neighbour.

Pakistan is expected to announce a road map for a switchover from the current selective, or positive, list to a much shorter negative list during Commerce Minister Anand Sharma's visit to Islamabad from Monday. Sharma is leading a 150-member business delegation of chief executives.

"We have got indications that the negative list will have items such as automobiles, textile, pharmaceuticals and cosmetics," an Indian government official told ET. This was corroborated by a Pakistani official: "We want to protect items produced by our industry for a while. These will find inclusion in the negative list."

Pakistan had also said it would grant India the most favored nation, or MFN, status by removing the negative list and allow all imports by the end of the year.

"The understanding given to us by the Pakistani leadership is that the negative list will be announced in February. There is every reason for us to believe that Pakistan wants to move to a regime that enhances economic engagement and brings peace and prosperity," Sharma told reporters before his departure.

Pakistan is supposed to give India MFN under WTO and South Asia Free Trade Agreement, or Safta. India, on its part, is sticking to the commitments made in Safta and has already brought down tariffs on goods from Pakistan to 8%. "We will bring it down to 5% by the end of the year," Sharma said.

Political compulsions have prevented New Delhi and Islamabad from exploiting the huge trade potential between the two countries. While Pakistan can source cheaper Indian goods, India can get easy access to West Asia's energy resources through Pakistan.

India's exports to Pakistan stand at $ 2.4 billion and imports at $400 million, but business chambers peg the trade potential at $10 billion.

Pakistan imports only about 2,000 items on a positive list while it imports nearly 9,000 items from other countries.

According to Commerce Secretary Rahul Khullar, India understands Islamabad's compulsions in opening up trade in automobiles, pharmaceuticals and textiles.

Pakistan may also place petroleum products on the negative list even though it is not a producer.

Sharma and his counterpart, Makhdoom Amin Fahim, will visit the India Show in Lahore and meet business chambers of the two countries.

The two countries may also announce a time frame for signing a business visa agreement to allow multiple entry and multi-point visits and a fresh date for starting the new integrated checkpoint at Wagah, Sharma said.

About 150 CEOs including Modi enterprises chairman K K Modi, Jet Airways chairman Naresh Goyal, Kanoria chemicals chairman R V Kanoria, J K Paper MD H P Singhania, Hero Corporate chairman S K Munjal, Mahindra Holidays chairman Arun Nanda harti Enterprises MD Rajan Bharti Mittal and senior representatives from Tata Motors, Escorts and Godrej are part of the delegation.

Source : economictimes.indiatimes.com