Pak farmers demand curbs on agri, food imports from India

Sai Nikesh D | The Dollar Business Pakistan farmer organisations have held a rally in Lahore this week, opposing the import policy of agri and food products from India which has led to a surge in agri and food imports from India in recent years. According to sources in Pakistan, all major farmers’ associations — Kissan Board Pakistan, Farmers Associates Pakistan, Kissan Ittehad, Awane Zaraat, Sindh Tas Water Council, and Punjab Water Council – have come together to demand the withdrawal of the March 2012 statutory notification which allowed duty-free import of 137 items through Wagah border. Pakistani farmers say that the Wagah border is close to India’s Punjab, which is considered the food bowl of India, and also close to Pakistan's most populated area. They add that duty-free imports through this important transit is tantamount to Pakistan granting the Most Favoured Nation (MFN) status to India. Under World Trade Organisation (WTO) obligations, India has granted the MFN status to Pakistan in 1996, but Pakistan has not reciprocated so far. Pakistani farmers have been demanding for a level playing field before granting the MFN status to India due to enormous subsidies by India to its agriculture sector.

Source - Ministry of Commerce, India

Talks on MFN status reached a new high last year with the involvement of trade associations from both sides. Syed Yawar Ali, Pakistan Co-Chair of the India Pakistan Joint Business Forum (IPJBF) had said in July 2014 that all formalities about MFN for India had been completed and it’s only a question of time now. However, the Kashmir dispute stalled the process yet again. Restrictions on trade via Wagah border will hurt India’s agri and food exports. In FY2013-14, India’s exports of agro food products to Pakistan stood at around $310 million, up around 40% y/y. Exports of vegetables accounted for around 43% of total agri and food exports from India to Pakistan in the year. It is estimated that bilateral trade between India and Pakistan has the potential to grow almost four times to over $10 billion if Pakistan grants the Most Favoured Nation (MFN) status to India. However, much of it will be in India’s favour. According to a World Bank study, while MFN status to India would lead to a surge in Pakistan’s imports from India by 32%, India’s imports from Pakistan will increase by just 0.4%. Pakistan MFN to India would push imports in sectors such as chemicals, rubber and plastic, processed food, mineral fuels, metals, machinery and equipment, textiles, leather products, dairy products, and seafood. In comparison, Pakistan’s exports are expected to increase in sectors such as plant-based fibres, animal products and metals.  

This article was published on January 13, 2015.