The FTA with Pakistan is India's most ambitious trade pact offer to any country, with just 100 product tariff lines kept outside the trade basket, unlike other pacts where trade in around 900-1,000 products is excluded. Commerce ministry mandarins in charge of pushing the trade liberalization agenda with Pakistan have asked their counterparts to seek a fresh approval for the trade pact once the new Nawaz Sharif cabinet settles in.
"We are saying don't have a rethink on this, let's get on with it this time," Mehta said, adding, "we have urged them to reset the timelines which have slipped a bit, and take the necessary next steps such as getting the new cabinet's approval." The joint secretary is in charge of India's trade ties with its South Asian neighbours.
Pakistan's exports to India crossed $500 million for the first time in 2012-13, growing at the fastest rate ever, rising 28% from $401 million a year ago to over $513 million. India's exports to Pakistan grew by around 19% in 2012-13 to about $1.8 billion.
The Indian cabinet has already approved the consensus reached last September under which Pakistan was to grant India the Most Favoured Nation (MFN) status and lift border trade restrictions on the Wagah-Attari land route by December 2012, a deadline that would need to be re-assigned by the new regime in Pakistan.
These two deliverables from Pakistan are to trigger India's commitment to bring down its negative list under the South Asian Free Trade Agreementframework to 100 tariff lines from the present level of 614. Pakistan would then notify the dates over which it will whittle down its negative list from 936 tariff lines to 100 over a five-year period. By 2020, the maximum import duty on all other items was to be reduced to 5%.
India is hoping the two sides will also expedite action on other areas where convergencewas achieved in 2012. These include the creation of an Indo-Pak Joint Business Council to guide the bilateral trade and investment dialogue and improving air connectivity between New Delhi and Islamabad. More efficient courier services and telecom linkages, including international roaming facilities are also to be explored.
"We have told Pakistan that granting the MFN status to India is not so much about boosting trade, but is an important political symbol that the two countries want to work together and improve trade ties which can help create an environment for joint investments and resolving other contentious issues over time," Mehta said..
The Commerce ministry pointed out that though the consensus reached last September, would be operationalised under the multilateral SAFTA, India and Pakistanwould be the largest beneficiaries of the liberalised trade regime. "This is our most ambitious FTA," the official said.