• MFN status for India: Its Pros and Cons

    Pakistan and India are the two important members of South Asian Association for Regional Corporation (SAARC) and are neighbors as well. There are many potentials of cooperation between the two countries in many sectors like trade, industry, research, technical cooperation, education and health care but none has been worked on due to the relations between the both countries which are always varying and never remain constant, ups and downs remain a part of India Pakistan relation, instead of attaining benefit from the geographical proximity, both the countries have always been busy in sorting out their disputes.

    There were no measures taken cooperate but only resources got wasted in wars. When the countries were starting to have more problems the SAARC chamber of Commerce industry started to realize that it was only destabilizing both the countries so they brought both the countries on the table to talk and discuss how economic cooperation can subsequently shape things a bit, due to trade Pakistan and India differences could get a little better.

    A framework was agreed upon both the countries which would help to stabilize trade between both the countries, the framework was agreed, both the countries agreed that thi could be a way to normalize relations between each other and a trust can be formed as well.

    To promote trade, both tariff and non-tariff barriers need to be reduced or removed completely. Both sides agreed to do trade through the Wagha-Attari border.

    It was decided to enable trade of electricity, both the countries agreed on trade of all types of petroleum, initiative to promote cotton.

    Pakistan realized that granting MFN status to India would help in promoting bilateral trade relations. Both countries decided to grant business visas, bank branches were opening in both the countries for fast track transactions

    The ice started melting from Pakistan’s side and it decided to grant MFN status to India in 2011, then Pakistan decided that it would be gving MFN status in the new government 2013, then it was decided if the Indian government would be ready to take off the Non-tariff barriers then only Pakistan will give it MFN status, but no  step was taken on any of it. 

    India gave Pakistan MFN status, but it was only India who was having pros from this status, as it was importing much and exporting less, Pakistan getting filled with Indian goods.



    There are more cons, than pros in giving MFN status to India

    By giving MFN to India it would mean open access of India in Pakistan, it could cause security threats, know how of everything going in markets, one can’t figure out if the person coming for trade is really a trader or an agent after all Pakistan and India’s issues are never-ending, it would not be a very good decision, Secondly India said that it gave MFN status to Pakistan but still all the Pakistani’s going for trade are getting checked again and again, their id cards their documents. India does not export much, Pakistan is the one who is exporting much from India, so even economically Pakistan won’t be getting any advantages much.

    The Pros can be the geographical location, both the countries have idle locations, if they are involved in trade, the cost of transport will be less, the goods will reach their destination on time with a little amount of transport expenses. There are immense potentials of cooperation in sectors of trade, industry research, technical corporation and many more sectors but security threats and profit is becoming the main hurdle. Pakistan figured out that MFN to India could expand bilateral trade relations

    The both countries decided to trade petroleum, exchange of electricity, both countries decided to open banking system so trade could be convenient, both the countries decided to take of the NTBs, but no step was taken by both the countries, if any step would have been taken, both countries could have had advantages, but none of it happened.

    So, granting MFN to India would not be much advantageous to Pakistan, as it is to India in giving Pakistan the MFN.