India as Mfn

7/28/2019 India as Mfn

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Presented by:Sadia Khalid-(BC09-069)

Saira Khan-(BC09-067)

Sana Javaid-(BC09-070)

Bcom hons. (Morning)Semester : 5Section: ASubject: MANAGEMENT


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A country that grants MFN on imports will have its importsprovided by the most efficient supplier.

MFN allows smaller countries, in particular, to participate inthe advantages that larger countries often grant to each other

Granting MFN has domestic benefits

MFN restrains domestic special interests from obtainingprotectionist measures.

Common benefits of MFN


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Exports

Vegetables and fruits

Textile yarn andfabrics

Leather and leathermanufacture

Petroleum crude

Plants for perfume

Pharmaceuticals

Rice & Sugar

Imports

Capitalgoods

Dyes andchemicals

Iron and ore

Spices andfruits

TRADE BETWEEN PAKISTAN AND INDIA


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Indian intransigence on Kashmir

High Tariffs

Quality Checks

Customs Valuations

Bureaucratic Inertia

Clearance of goods

Travel Restrictions

Factors Responsible For Limited Pakistan-India Trade


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Inadequate Infrastructure

Excessive Red Tape: Constraints on Visas

Direct Political Opposition

Customs Clearances

Factors Responsible For Limited Pakistan-India Trade


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India granted the MFN status to Pakistan way back

in 1996. The gesture, however, did not help Pakistanin any way, because it was followed by the

imposition of a number of non-tariff barriers by the

Indian side, which ironically further crippled the

access of the Pakistani products to the Indian

market


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MFN STATUS GIVEN TO INDIA BY PAKISTAN

On October 2nd ,2011 in the meeting of Federal Cabinet Of Pakistan, it

was decided that India Is The Most Favored Nation Of Pakistan For

Trade it is a noteworthy step initiated by Pakistan to enhance bilateral

ties between the two countries that had fought two major wars and many

minor rifts. The move is a good omen demonstrative of reconciliatoryrelations between two nuclear-powered neighbors.

The announcement by the government of Pakistan to grant the most

favored nation (MFN) status to India continues to draw mixed reaction

from all quarters, industrialists, business community at large,

agriculturists and security analysts. On the one hand, there is this

lobby, which argues that by doing so not only do we get access to A

robust market of more than A billion people. On the other hand, is A

large cross section of nervous manufacturers, struggling farmers and

skeptical security personnel, who all remain equally fearful ofindias

regional designs in particular, and its poor track record on bilateral

trade in general


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CRITISISM ON DECLARING INDIA AS MFN


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CRITISISM ON DECLARING INDIA AS MFN


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Pharmaceuticals Forum view about MFN to India The Pakistan Pharmaceutical Manufacturers Association (PPMA)

feels that all medicines should be on the negative list, as the industry

forms the second line of defense in case of war, natural disasters, or

epidemics

the PPMA meets around 90 percent of the countrys demand of

finished medicine.

According to them, the Indians already have very solid non-tariff

barriers in place to protect their home industry and the size of the

Indian pharmaceutical market is 10 times larger than the Pakistani

market

Pakistani pharmaceutical industry should get similar State support

and protection


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Liberal trade regime with India would reduce pressure ofescalating inflation

Pakistan was importing merchandise from India of which Rs5.5billion worth of products were being traded via Dubai andSingapore increasing the cost of doing business in the country

India had significant demand for Pakistani horticultureproducts, including kinnow and mango

local cement industry was more competitive attract huge foreignexchange

Pakistan should import cheaper fertilizers, diesel and electricityfrom there

Rate of agriculture produce is much higher in India than Pakistanwhile their cost of production is very low,

Agriculture forum view about MFN to India


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Textile sector view regarding MFN

Our basic textiles have competitive advantage over India while we

could develop high value-added textile by importing low cost

accessories from India

India gave 7.5 %rebate on yarn exports, while there was none in

Pakistan. Similarly, yarn imports in Pakistan were duty free while

there was 10 % duty on its imports in India.

Aptma-Punjab chairman Ahsan Bashir :


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Official Statements by Commerce Secretary to assure local

exporters level playing field

Zafar Mahmood Secretary Commerce

said while briefing the Senate Standing

Committee on Commerce about the

MFN status to India


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Zafar Mahmood Secretary Commerce said while briefing the Senate

Standing Committee on Commerce about the MFN status to India

Pakistan would not implement the free trade regime without

ensuring level playing field for its exporters

Islamabad has proposed three agreements be signed with

New Delhi.

1. the Customs Cooperation Agreement to address Pakistani

exporters complaints of Indians charging high taxes,

2. Mutual Recognition Agreement for standardization ofquality standards

3. Redressal Grievances Agreements and Preferential tariffto

address consumer protection issues


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We have asked Indian side to get signing

approval of such agreements from their

relevant ministries or departments before the

arrival of their commerce ministers arrival inPakistan by mid February 2012,

The Express Tribune

December 23, 2011


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The Negative List :

In September this year Pakistan is going to replace trade-

able list, known as positive list currently comprising 1,958

items, with non-trade-able list, known as Negative list, byFebruary 2012, under trade liberalization arrangement and

so far local industries have proposed less than 1000 items

for placement in negative list .

However many items proposed by local industries need to

be excluded from proposed negative list as few of such

items are not even imported from India


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Secretary Commerce assured the committee that that before

completion of trade liberalization with India as per MFN, an effective

level of protection would be ensured to safe guard the local industries,

as well as they would be able to use trade defense instruments like anti-

dumping duty, countervailing duty and safeguard duty against any trade

threat

But Senator Haroon Akhtar Khan and Senator Abdul Razzaq are of

the view that

normalization of trade with India would greatly benefit Indiacompared with Pakistan.

Pakistans trade deficit would shoot up many folds

local industries would be facing tough competition against Indian

subsidized products.


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Will the implementation of negative-listtake effect as promised or will it be

delayed beyond December 2012; or beforgotten altogether?- it is for the Federal

Cabinet to decide

Will there be any regard given to localindustries when Ministry of

Commerce approaches FederalCabinet in February 2012 and tradeliberalization takes place as per Most

Favored Nation status?

The questions arises????????


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ConclusionThere is no denying the fact that bilateral trade on

equal terms will surely be very beneficial to both

Pakistan and India. It will not only strengthen the

economies of both the countries, but also over time

can be the key to resolving longstanding sticky

issues between the two sides

However, Pakistan needs to be careful and do its

homework properly before granting such a status.

In doing so, it needs to grapple with the elementsof reciprocity and fair play to provide a level

playing field to its own people


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India as Mfn