There has been a lot of talk about India engaging with Pakistan on doing business. But, while we have seen this discussion happen in the past, this time the effort seem to be more credible and more real.
On the Pakistan side, there continues to be some dithering on how to engage with India. Can we actually move beyond the USD 2.7 billion trade number that we have achieved to USD 10 billion which both sides are targeting? Is there more optimism and more hype than what exists currently on the ground?
To discuss the roadblocks, the impediments and the baggage that both sides carry, CNBC-TV18’s Shereen Bhan is joined by an esteemed panel, part of the delegation that travelled to Pakistan to engage with their Pakistani counterparts.
Joining this discussion are Adi Godrej, president of CII and chairman of Godrej Group; Rakesh Mittal, VC & MD, Bharti Enterprises; Chandrajit Banerjee, Director General of CII and Rahul Bajaj, Former President of CII and chairman of Bajaj Auto.
Below is an edited transcript of the interview. Also watch the accompanying videos.
Q: There has been so much talk on engaging with Pakistan, but they continue to dither on whether India will enjoy the Most Favoured Nation status or not. At the end of it, given our political legacy and the baggage we carry on both sides, is the opportunity big enough to take on the kind of risk involved?
Godrej: I do not think there is any risk involved. I think the two neighbours with such a large land boundary and vast population should have much more trade than we do now and we should have mutual investment.
This is the right time because both sides are clear that they would like to take this forward. We met all the different political elements in Pakistan - the ruling party, Nawaz Sharif’s party and Imran Khan - and everybody is clear that they would like to take this forward.
Q: Then why they dithering on MFN because we saw them putting it out and then pulling it back. It’s still unclear whether come 2012 there will be a change of status or not?
Godrej: I think it’s clear now. The negative list will come very soon and MFN is expected by December and they are clear that they will go ahead with it.
Q: But for any business to make some serious investment, you would require stability. Tomorrow, come a 26/11 god forbid, you do not want a clampdown, you do not want to risk your business investments?
Godrej: The amount of investments that will be made will be gradual. Exports can start once the negative list is placed. Currently, only industrial exports are permitted, consumer products many of them are not in the negative list, so exports could start and then investments could start.
It will be a gradual process, but it’s a process that should start. This is the right time so we should seize the opportunity. There is huge potential, because to my mind two neighbours so well placed geographically could have huge trade with each other.
Q: Is the difference in engagement on account of the fact that perhaps they need us more than we need them or is that our perception?
Mittal: I think both the countries have their own strengths and weaknesses and therefore there are synergies and opportunities on both sides. I went after seven years, and there is a sea of change in what I saw. I think to my mind Pakistan and India are not isolated from the economic situation in the region, and therefore both sides believe that there are opportunities to start building up trade and people to people contact.
I can tell you on agriculture, on healthcare, on education and energy there are clear synergies. As a matter of fact, one of the suggestions I made was to have cooperation between the two Punjabs and I believe that could be the gateway for bringing up the bilateral trade.
Q: How far is this from reality? We have had this engagement in the past as well, this time around it seems a lot more real than what we have seen in the past. But how far are we from actually implementing all of this on the ground and in reality?
Mittal: If you see the duties which have been reduced by India and clearly Pakistan’s sentiment of coming out with a negative list which will be 100% withdrawn by the end of December, I think to my mind a clear positive signal from both sides.
I also believe that if the visa regime can be made more easy and flexible for business and people to people contact, that will only further develop.
Q: What is the feedback from our home ministry as far as that is concerned? We are troubled with China and we are talking about Pakistan and easy visa requirements here?
Mittal: My understanding is that both the governments are engaged and very soon we should hear something from them on easing the visa regime.
Godrej: The business visa which has come about will allow you to travel to any of the SAARC countries. It is a multiple entry visa and it is for a period of time, so once we get on to that kind of a visa regime travel will be made easy.
READ MORE ON Pakistan, India, foreign trade.Adi Godrej, Rakesh Mittal, Rahul Bajaj, Chandrajit Banerjee
ADS BY GOOGLE
video of the day
Nifty to fall below 7500 if Q3 disappoints; GST key: Kumar