Sunday, March 19 2006 10:51 Hrs (IST) - World Time -

New Delhi: Bilateral trade between India and Pakistan is estimated to have crossed one billion dollar so far this fiscal while illegal trade reduced by 50 per cent with implementation of SAFTA and opening up of rail and road linkages, industry body Assocham said today(Mar 19,2006). The illegal trade, estimated to be two billion dollars in 2004-05, is projected to have come down to one billion dollarsby February 2006, the chamber said in a release.

On the other hand, official trade has increased by 400 million dollars till February-end 2006 to cross one billion dollars, it said.

"The establishment of relations along with SAFTA has brought changes in customs tariffs and reduced trade-related barriers leading to restoration of direct trade linkages and reducing the transaction costs," the chamber said.

Illegal trade flourished owing to easier flow of goods and services due to a developed network of informal traders across borders, lower transaction costs and no taxes, the chamber said. The items of informal trade include clothes, machinery, tyres, cosmetics and jewellery, drugs, livestock,chemicals, dry fruits, tobacco and leather products.

However, it noted that with better ties, illegal trade could be wiped out and official trade could touch 10 billion dollars by 2010.

The chamber identified closer cooperation in areas of tea, sugar, fruits, vegetables and basmati rice, energy, tourism, IT & services, cotton, textile and machinery and pharmaceuticals and chemicals. The chamber also suggested joint ventures in key sectors including energy and textiles.