PEW advises government on bilateral trade with India
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Govt cautioned over trade with India
Pakistan’s key economic sectors unprepared for competition with India
The Pakistan Economy Watch (PEW) while lauding the government’s decision to delay granting MFN status to India asked the policymakers to ensure level playing field to local industrial and agricultural sectors.
Textile industry is the main foreign exchange earner for Pakistan but the sector has
been unable to make inroads into the Indian market due to barriers, said Dr. Murtaza Mughal, President PEW.
Speaking to a pre-budget seminar at Institute of Policy Studies (IPS), he said that massive subsidies, interventions, and support available to the Indian cotton and textile sector against Pakistan will put us on great disadvantage if bilateral trade is liberalised.
Similarly, Dr. Murtaza Mughal said, “the government should not open the floodgates to such an extent that it proves detrimental to the interest of the local auto industry which is not prepared for the competition.”
However, government can allow import of raw material, inputs, machine tools, machinery, equipment and some other set of products, he opined.
Comparing the pharmaceutical sectors of the two countries, Dr. Murtaza Mughal said that vast difference exists between drug sectors. Pakistan’s pharma industry is worth $2 billion versus $40 billion Indian industry; our exports fetch $200 million while India earns $20 billion from pharms exports.
Dr. Murtaza Mughal said that huge hidden and budgeted subsidies to the tune of $99 billion makes it impossible for the Pakistani agricultural sector to compete with India which if allowed would be a disaster.
The size of Indian economy and magnitude of its industry leaves Pakistan unable to compete on equal basis in Indian market, he noted.
He urged the government to take measures to address energy shortages, law and order, general uncertainty, lack of infrastructural facilities and tariff as well as non-tariff barriers by India before we can open up bilateral trade.
DG IPS Khalid Rehman, Chief Executive Microeconomics Insight Saqib Sherani, Prof Attiq Zafar, Raja Amir Iqbal, and Masud Dahir were also present on the occasion.
