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comp Engr · #13 Friday, September 27, 2013

Pak-India Relations

Following are the factors to be discussed in it:

1) Water Dispute between India and Pakistan

2) Indian Presence in Afghanistan

3) Indian presence in Baluchistan and FATA

4) Economic Liberalization

4.1) Most Favorite Nation (MFN) Status

4.2) Transit Trade
4.2.1) Against Group
4.2.2) Favour Group

1) WATER DISPUTES:

As per the Indus Water Treaty, Pak has to get 55,000 cusec water in peak season but it has got only 20,000 cusec last year. and Since 2007 only receiving 20 to 22 k cusec of water every year in peak seasons. As per the treaty, India may utilise water but can't divert the flow of water. India is violating the treaty in a sense that it has been constructing Baghliar Dam without satisfying Pakistan's concerns. It has also been constructing Kashan Ganga, Dulhasti, Dugar, Gondhala and a few other dams as reservoirs on Chenab and Jhelum rivers diverting the flow of water which is clearly the violation of the said treaty. However, India has right to construct dams but the point of NO DIVERSION OF WATER FLOW should be kept in mind before passingany dam for construction. India is violating the treaty due to this less water flow in Pakistan. Owing to the violation, Pakistan has to bear the brunt of losses worth Rs. 1 billion per crop plus the irrigated land of South Punjab is steadily converting into barren lands. As per the treaty, India has to inform to Pakistan 6 months advance regarding construction of any dam on the river that flows into Pakistan, but it does not which is a clear violation of treaty. Whenever there is more water, India releases its floods into Pakistan. The recent deluge release into Pakistan may be taken as an example. Baghliar and other wager issues shall be solved through negotiations as they were done in case of "SALAL" dam in 1978. Pakistan is always eager for talks with India but India only agrees when there is an international pressure.

2) INDIAN PRESENCE IN AFGHANISTAN:

Since 2004-2009, India was the biggest regional investor & donor to Afghanistan. India has invested more than $2 billion. It has also constructed Zaranj Dilaram Road or Namyan Chaghbar road that would connect Afghansitan with Iran's sea port Chaabaghar and spent a huge amount of $1.3 billion on this very project. President Commerce and Trade has recently stated that due to this road, the transit capability of of Pakistan will be affected by at least 40%. By this, India also wants to minimize the dependency of world over Pakistan transit facility via Gwadar to reach CAR countries. In April 2012, India had sent a convoy of 400 trucks of donations plus trade to Afghanistan through this route. The basic and long run aim of India is to minimise the transit trade in Pakistan as well as to reach the Central Asian Republic countries. Apart from these investments, India has other investments in Afghansitan worth $1.5 billion.

There are around 17 Indian consulates in Afghanistan particularly on AFPAK border areas e.g. Kandhaar, Kabul, Jalalabad, Khost etc which are indeed a strategic trouble for Afghanistan. A strategic pact has also been signed between India and Afghanistan according to which:

a) India would provide assistance to health, education, telecom and most importantly defence and security.

b) Indian trainers would train Afghan forces.

Pakistan does understand Indian appetite for energy and economic growth and has due concerns against the sectarian involvement as well as their growing number of consulates in Afghanistan.

3) INDIAN PRESENCE IN BALOCHISTAN AND FATA:

The Rameshwar Nath Kao's KAO PLAN made by Research Analysis Wing (RAW) in 1962 under the Prime Minister ship of Indra Gandhi can not be ignored in this regard. It has three parts as follows:

a) KAO PLAN A i.e. Disintegration of East Pakistan

b) KAO PLAN B i.e. Disintegration of Balochistan

c) KAO PLAN C i.e. Disintegration of Khyber Pakhtun Khuaah, the then NWFP

KAO PLAN is considered to be one of the most diligent reasons against the separation of East Pakistan. The similar strategy is being adopted by India in Baluchistan & its role can be easily felt if one critically examines the KAO PLAN. KAO PLAN B i.e. KAO PLAN BALUCHISTAN is practically being implied in Baluchistan since 2006 onward.

According to the Ex-Interior Minister Rehman Malik, Indian ammunition, currency and passports etc were recovered in KOHLO MILITARY OPERATION. The warmth of involvement of India in the region can also be felt by analysing the Red Carpet welcome of Baram Dagh Bugti in New Delhi.

As far as the Indian presence in Federally Administered Tribal Areas (FATA) is concerned, during the Rah e Nijat Operation there, Pakistani forces found Indian currency, ammunition and passports which intensifies Indian presence and role in the area.

4) ECONOMIC LIBERALIZATION:

Economic liberalization between the two arch rivals will be discussed under the headings of transit trade and MFN status.

4.1) TRANSIT TRADE:

In spite of Zaranj Dilaram Road, India is still interested to trade with Pakistan and want to normalize trade ties with us. The eager of Indian government to increase the ties can be felt by the sign that Indian government allowed Pakistani Investors to invest in India.

Through Iran, India is provided with only one sea route that is Mumbai Sea Port. It is very expensive for transportation particularly the transportation of energy which is almost impossible because such transportation can not be done without pipe lining under the sea which is very expensive. Particularly the transportation of gas in the form of LPG is very expensive, India thoug once part of TAPI Project i.e. Turkmenistan, Afghanistan, Pakistan and India is no more a part of this project. Pakistan provides different routes for this such as from Port Qasim to Mumbai and any product for Indian Punjab and Delhi via Wahga, Sindh to Rajhastan and many road points in Kashmir. Pakistan is capable to provide all the three major alternatives of trade route i.e. Road, Rail and Sea.

4.2) MOST FAVORITE NATION (MFN)

As per one of the clauses of World Trade Organisation, when one country gives MFN status to another, the awardening country becomes a priority to conduct business with the target country.

However, there are two groups regarding the MFN Status to India, each in favour and against it.

4.2.1) AGAINST GROUP:

If India is given the MFN Status, it would be a great setback to the agricultural as well as industrial sector of Pakistan. Indian agricultural sector is far developed in terms of both quality and quantity than that of Pakistan. The major reasons behind are subsidies to farmers and low electricity price for agricultural purposes. For Instance, the price of Urea bag in India is Rs. 680 as compared to Pakistan where the price is Rs. 1800 per bag. India has also introduced latest farming technologies and also provide such technical assistance to its farmers, apart, best quality seeds are provided to the farmers for sowing purposes so that the output shall be of supreme quality.

As far as the industrial devastating effects on Pakistan are concerned, they are very high. For Instance the price of Maruti car is half the price of Mehran. One may compare the quality and price of Hero Honda in India and Honda in Pakistan. Furthermore, the multinational companies (MNCs) are stronger in India than in Pakistan due to lower taxes.

Comparing the Pharmaceutical Sector of India with Pakistan, our industry is fulfilling the 85%+ needs of our people. However, our products are generally expensive than Indian products. According to the World Bank Report, if India has been awarded the MFN status by Pakistan, Pakistan would not be able to make a Negative List (NON IMPORTED PRODUCTS) or even a weak list. The similar thing happened to Pakistan in 2010-2011 when Pakistn got $500 million loss, according to the Secretary Commerce and Trade.

Interestingly, India has given us the MFN status in 1996 but we still have not given them that status. Around 2200 different Indian products are floating in Pakistan, however, only around 800 Pakistani products are floating in their economy and even those 800 products are meager in amount. This is because of the high non tariff barriers. As per the WTO Constitution, the percentage ration of such barriers shall be 12%, however, this ratio of non tariff barriers in India is 38%. One of the strong arguments against awarding MFN status to India is that on one side they are asking for MFN status and on the other side, they are busy in designing hegemonic designs against Pakistan.

According to SAFTA i.e. South Asian Free Trade Association, also a sub-institution of SAARC, India is bound to reduce its non tariff barriers to a minimum level. Yet again it is the highest in the region.

4.2.2) FAVOUR GROUP:

The group which is in favour of awarding MFN status argues that the current trade between the two is around $1 billion per annum but the illegal and indirect trade is above $5 billion. They also create an argument that the industrial products are first traveled to Dubai, Singapore and Chabghar in Iran and then floated to Pakistan with higher prices. Such products include Indian MRF tires, Cosmetics e.g. fair and lovely, Dabur Amla, Vatica etc. Smuggling, only in border through red cliff points in Kashmir and Rajasthan is more than $1 billion per annum. Indian products, primarily-ily meant for Afghanistan come back to Paksitan with higher prices through illegal channels. Yet again there is a demand of these products in Pakistan means there is a market space for these products in our economy. Keeping this in mind, there is a dire need to legalise the trade of these products to benefit the end consumer.

Analysts also comment that as India is one if the fastest and highest growing industrial countries of the world i.e.e the 3rd in the world, Pakistan shall grant MFN status to India. For instance, Liver Brothers is the biggest producer of products in India, If Pakistan import these products from India, there will be a sharp difference of prices in locally manufactured products and imported products, the imported ones will be of definitely lower price. It is also stated that giving MFN status to India will also help improves both trade and strategic ties between the two historically arch rival countries. In the repercussion, rise of trade will lead to rise in people-to-people connections i.e.e risen dependency upon each other. This higher dependency will mean less chances of a full fledged war as well as the skirmishes at border, that ultimately means paltry defence budget leading to the higher socio-economic development of both the countries.