India – Pakistan Trade

Quantitative studies estimate that potential two way trade between India and Pakistan can be about 10 times than its rather unsatisfactory current level of $ 613 million. Moving towards realizing this trade potential is clearly in the interest of both countries and the region. In this context this study identifies areas of trade and investment co-operation between the two countries. On the basis of a survey conducted in three cities viz., Delhi, Mumbai and Amritsar the paper examines the characteristics of firms engaged in Indo- Pakistan trade. It also estimates the transaction costs of trade on the basis of a detailed examination of existing transport arrangement between the two countries and the impact of all extant non-tariff barriers. The study suggests that the most important step towards enhancing trade would be to adopt the MFN principle as the current policy inhibits trade, lacks transparency and leads to high transaction costs. The study finds that transportation links between the two countries are inadequate and suggests that new rail and road links should be opened. Transaction costs of trading between India and Pakistan are high and can be lowered by implementing some rather simple policy measures that are spelled out in the paper. The study also examines recent developments in BIMSTEC, ASEAN and in Indo-Sri Lanka and Indo-Nepal trade agreements, and draws lessons to enhance Indo-Pakistan trade.South Asia, India-Pakistan trade, commercial policy, MFN

India - Pakistan Trade

Quantitative studies estimate that potential two way trade between India and Pakistan can be about 10 times than its rather unsatisfactory current level of $ 613 million. Moving towards realizing this trade potential is clearly in the interest of both countries and the region. In this context this study identifies areas of trade and investment co-operation between the two countries. On the basis of a survey conducted in three cities viz., Delhi, Mumbai and Amritsar the paper examines the characteristics of firms engaged in Indo-Pakistan trade. It also estimates existing transport arrangement between the two countries and the impact of all extant non-tariff barriers. The study suggests that the most important step towards enhancing trade would be to adopt the MFN principle as the current policy inhibits trade, lacks transparency and leads to high transaction costs. The study finds that transportation links between the two countries are inadequate and suggests that new rail and road links should be opened. Transaction costs of trading between India and Pakistan are high and can be lowered by implementing some rather simple policy measures that are spelled out in the paper. The study also examines recent developments in BIMSTEC, ASEAN and in Indo-Sri Lanka and Indo-Nepal trade agreements, and draws lessons to enhance Indo-Pakistan trade.South Asia, India-Pakistan trade, commercial policy, MFN

Trade Possibilities and Non-Tariff Barriers to Indo-Pak Trade

This paper aims to identify the bilateral trade possibilities and non-tariff barriers between India and Pakistan. The study shows that there is a large untapped trade potential between the two countries. Using the potential trade approach, the study finds that the export potential from India to Pakistan is to the tune of US$9.5 billion while that from Pakistan to India is US$ 2.2 billion. Items having export potential from Pakistan are largely in the textile sector while items having export potential from India are predominantly in non-textile sectors. Very few items having export potential from India are on the positive list adopted by Pakistan. At the same time there are several items that India is importing from other countries but not from Pakistan. This indicates that there is a huge information gap on both sides on items that can be imported by India from Pakistan. A working definition of non-tariff barriers adopted in the study included six major categories, namely, quantitative restrictions, trade facilitation and customs procedures, technical barriers to trade and sanitary and phytosanitary measures, financial measures, para-tariff measures and visas. The study was based on an extensive survey conducted in several cities in India and Pakistan. Further, despite the two countries having liberalized their import regimes, Pakistan continues to follow a positive list approach towards Indian imports. The study identifies the ways in which this policy impedes Indias exports and recommends the dismantling of the positive list. It also identifies problems related to transportation, custom procedures, rules of origin certification and valuation and suggests measures to address them. The imposition and application of standards in India was perceived as a major non-tariff barrier by Pakistani exporters. The study found that even though the TBT and SPS measures are not discriminatory across trading partners, Pakistani exports to India are surely affected by these. Pakistan has an export interest in textiles and agricultural products which also happen to be sectors where import restrictions/standards are most rigorously applied by India. It also found that due to a restrictive visa regime only selected traders have access to trade-related information. Thus lack of transparency, market imperfections and information asymmetries on both sides raise transaction costs and restrict market access for several other aspiring traders.trade, trade policy, non-tariff barriers, South Asia, India Pakistan and International Relations

Wzrost niskowęglowy: zrównoważoność i rozwój technologiczny z perspektywy Indii

This paper provides an Indian perspective on the issue of technology transfer, in the specific context of tackling climate change. The paper examines how technology transfer issues have panned out when developing countries have had to meet standards laid down in international agreements. In addressing climate change, the efficacy of the CDM as an instrument to facilitate technology transfer is analysed. The socio-political and economic analysis of implementing the clean development mechanism provides useful insights. An indicative exercise on India’s export vulnerability in the face of alternative regulatory regimes such as imposition of carbon tariffs demonstrates the importance of technology transfer mechanisms between the developed and developing countries. The attainment of sustainable development through forward looking mechanisms of technology transfer will improve India’s contribution to a global solution for climate change.Artykuł przedstawia doświadczenia związane z transferem technologii w kontekście przeciwdziałania zmianom klimatycznym na przykładzie Indii. Transfer technologii może przynieść oczekiwane rezultaty,  gdy kraje rozwijające się sprostają standardom zawartym w międzynarodowych porozumieniach. W kontekście zmian klimatycznych i transferu technologicznego została przeanalizowana skuteczność instrumentu CDM (Clean Development Mechanism, mechanizm czystego rozwoju).  Uwzględniono aspekty społeczno-polityczne i ekonomiczne.  Przykład wrażliwości indyjskiego eksportu w obliczu alternatywnych systemów regulacyjnych, takich, jak nałożenie podatku węglowego, ukaże znaczenie mechanizmów transferu technologii pomiędzy rozwiniętymi a rozwijającymi się krajami. Osiągnięcie rozwoju zrównoważonego przy pomocy wybiegających w przyszłość mechanizmów transferu technologicznego pozwoli powiększyć wkład Indii do globalnego rozwiązania problemu klimatycznego

India’s Informal Trade with Nepal: An Exploratory Assessment

The large and vibrant informal trade between India and Nepal continues to thrive despite unilateral/bilateral/regional/multilateral trade liberalisation in the two countries. This calls for an indepth analysis of India's informal trade with Nepal. Using insights from the New Institutional Economics informal and formal institutions engaged in cross-border trade are contrasted. The objective in juxtaposing formal and informal institutions in performing similar transactions viz., engaging in crossborder international trade is threefold: first, to understand how informal trading markets function vis-à-vis formal trading arrangements second, to analyse formal and informal trading arrangements particularly in the context of the relative importance of institutional factors vis-à-vis trade and domestic policy distortions, and third, to see whether informal trading arrangements provide better institutional solutions than formal trading arrangements. The analysis, carried out on the basis of an extensive survey conducted in India and Nepal reveals that informal traders in India and Nepal have developed efficient mechanisms for contract enforcement, information flows, risk sharing and risk mitigation. Further, informal traders prefer to trade through the informal channel because the transaction costs of trading in the informal channel are significantly lower than the formal channel implying that informal trade takes place due to the inefficient institutional set up in the formal channel. Moreover, lower education levels of informal traders could be an important deterrent for using the formal channel. Finally, the analysis of discriminating characteristics of formal and informal traders in India and Nepal indicates that transaction cost and education level are the two common discriminating factors. An important policy implication from the study is that unless the transacting environment of formal traders improves, informal trade will continue to coexist with formal trade, even if free trade is established in the SAARC region