Monday, July 24 2006 17:35 Hrs (IST) - World Time -

New Delhi: The Mumbai terror bombings have cast a shadow on cross border relations with a Federation of Pakistan Chambers of Commerce and Industry (FPCCI) mission postponing its scheduled visit to India later this month and several Indian plans put on hold.

For the Federation of Indian Chambers of Commerce and Industry (FICCI) the last minute cancellation of the proposed five-day visit by the FPCCI team has come as a second blow, as it follows the indefinite postponement of plans to hold a 'Made in India' exhibition in Pakistan.

The exhibition planned by FICCI in Pakistan has been deferred to sometime in the future after two postponements in November and February.

"We fear the Mumbai developments could derail the on-going trade exchanges. While we hope it could be business as usual, the serial blasts will prove a setback, hopefully a temporary setback," a FICCI official told sources.

In their communications with FICCI, the Pakistan industry body had expressed reservations about coming to India in the wake of the Mumbai blasts in which at least 200 people were killed.

FICCI had arranged several high-level meetings at Chandigarh, Shimla and with Commerce Minister Kamal Nath in Delhi for the 117-member FPCCI team, which was expected to arrive July 31.

"The visit by FPCCI was to have been a reciprocal to our tour there in May 2005. With some of the members expressing reservations about visiting at this juncture, FPCCI decided to postpone the visit to a time when the environment is better. They may now come possibly in November," a FICCI source said.

According to industry sources the repeated postponement of exhibition plans not just of FICCI but also the Confederation of Indian Industry (CII) are proving a dampener for the prospective participants at it means financial losses besides making Pakistan seem an uncertain prospect.

"A week ago I would have said the Mumbai bombings would have a lasting impact. But following the conciliatory statements for continuing the peace talks by Prime Minister Manmohan Singh, the blow has been softened," said Amil Ullah Khan, deputy secretary general of the PHD Chamber of Commerce and Industry (PHDCCI).

Tracing its roots to Pakistan prior to partition, PHDCCI has been trying to exchange delegations and promote ties even through the lows of India-Pakistan bilateral relations.

The present mood in PHDCCI is, however, not so optimistic with Pakistan still not willing to accord most favoured nation (MFN) status to India and its insistence on maintaining a positive list even with the coming in force of SAFTA agreement this month.

"There is some scepticism among businessmen about investing in this relationship with Pakistan, which is not responding enough though the increase in bilateral trade have narrowed the deficit with growth in their exports to India. In the aftermath of the blasts, Indian business enthusiasm has been further blunted," said Khan.

The increased security concerns and lack of official permission from Pakistan has seen PHDCCI also defer plans to hold an exhibition originally proposed for August/September.

Similarly CII is uncertain when it would be able to hold an exhibition of Indian products in Pakistan even as it has given an open offer to FPCCI for hosting road shows of Pakistani goods in India.

"This could be a temporary hiccup. Normally if all conditions are conducive, business goes on as usual. Political climate cannot be the only reason for taking forward trade," said Jayant Bhuyan, deputy director general of CII.

He pointed out that despite the shadow of political unrest, Indian businessmen have ventured into Iraq and Afghanistan to pursue opportunities.

In the case of Pakistan, Bhuyan admitted that uncertainty about getting visas due to security concerns continues to be a big hurdle to growth in business plans.