Wednesday, October 5 2005 14:46 Hrs (IST) - World Time -

Karachi: Observing that the two countries were on the 'threshold of a major expansion' in people-to- people and business contacts, India today (Oct 05, 2005) asked Pakistan to open non-protected industries for regular trade and identified a number of sectors where cooperation would be beneficial.

Interacting with the business community of the commercial capital of Pakistan, External Affairs Minister K Natwar Singh said India was ready to look at non-tariff barriers within the ambit of the Joint Study Group.

He said there was a lot of scope for cooperation in areas like agriculture, chemicals, textile machinery, hydropower, drugs and pharmaceuticals, cotton industries.

India could look at importing power from Pakistan if the latter was surplus in it while that country could export cotton yarn, textile fabrics, surgical instruments, sports goods, electric fans and water coolers to India, Singh said addressing the members of Federation of Pakistan Chamber of Commerce here.

Pointing out that high import tariffs in Pakistan were acting as a deterrent in promoting bilateral trade, he said, "We understand that there are certain industries which need to be protected. We urge Pakistan to make a negative list of these and open the rest for regular trade or at least open these items that she presently imports from elsewhere to Indian trade."

Singh, who was presented with several suggestions by the Pakistani business community for promoting trade relations, said it would go a long way in enhancing Economic cooperation between the two countries.

He particularly pointed out that India could meet Pakistan's annual demand of 100,000 units of vehicle Tyres but the 46 per cent import tariff on the item acts as a deterrent.

"India has recently offered liberalizing import of 116 tariff lines of interest to Pakistan in South Asian Free Trade Arrangement (SAFTA).

Emphasising that business environment today was 'more favorable that it has ever been' between the two countries, he said the governments should facilitate contacts between the business communities of the two countries.

Singh, on a nostalgic revisit to Karachi after 23 years, said the two countries needed to turn their backs on the barriers and suspicions of the past and in some way endeavor to create and encourage the spirit of enterprise for businessmen in both the countries.

"Equally, there is challenge for the business community of both the countries," said Singh, who, 23 years back, had served as a diplomat at the Indian Consulate here.

"The environment which exists today, because of a number of conjectural forces and factors, is in many ways unique. It is for you to make full use of it," the External Affairs Minister told the industry leaders.

Singh said 'considerable increase' in trade had taken place in the last 12 months which was the 'most encouraging sign' resulting from more open visa regime than previously existed.

Sounding upbeat, Singh said once the two countries have better banking, airline, shipping and road transport linkages the results will be even more significant.

"It is our expectation that in the next few months there will be considerable advances in each of these specific sectors," he said while noting that reopening of Consulates in Mumbai and Karachi reflected the desire of both countries to facilitate expansion of such contacts to the fullest extent possible.

Talking about the current international environment providing further impetus to efforts in both India and Pakistan for expanding bilateral economic cooperation, Singh specifically referred to the 'burden' on both the economies due to the increase in price of hydrocarbons.

He said the two countries today had instruments, which would enable them to alleviate that burden by cooperation with third countries.

"Transnational pipelines, therefore immediately come to mind and this is an area which is of immense significance to all of us," the External Affairs Minister said.

He said the economies of both India and Pakistan were in the midst of a major growth spurt, which provides the "most favorable environment to conceive new concepts and ideas of how we can mutually benefit from existing complementarities." Reviewing the progress in last 18 months since the peace process started, Singh said 'numerous positive developments' had taken place, including rapid growth in economic and commercial contacts between the two countries. This, Singh said, had encouraged thinking and discussion about joint ventures, technical collaborations and better marketing strategies in either country.

The regional institutional environment, particularly given the impetus which has been provided by South Asian Preferential Trade Agreement (SAPTA) and SAFTA, is also more commerce and business sensitive than ever before, he said.

"There have been developments which inspire confidence that there is an emerging environment in which it would be possible to restructure the infrastructure of trade and economic cooperation," he said.

In this regard, he referred to small beginning having been made for direct trade through Attari-Wagah border, the good possibilities existing for such trade on the Srinagar-Muzaffarabad and Khokrapar-Munnabao routes, the interest shown in the Mumbai-Karachi ferry service and the ongoing Discussion on expanding the scope of the present civil aviation and shipping protocols between the two countries.