Textile ministry joins farmers in denouncing trade with India

By Zafar Bhutta

Published: November 22, 2012

The Ministry of Textile Industry now says that the future of local industry seems bleak because of the “hasty” decision to open Pakistani markets for Indian textiles.

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ISLAMABAD: After Pakistani farmers’ recent lobbying to prevent imports of agricultural produce from India, the Ministry of Textile Industry, too, seems to be getting cold feet ahead of the liberalisation of trade between the two estranged neighbours. Its apprehensions over the import of Indian textiles have surfaced hardly a month before the government is expected to phase out its negative list for goods tradable with India.

The Ministry of Textile Industry now says that the future of local industry seems bleak because of the “hasty” decision to open Pakistani markets for Indian textiles. It claims that allowing imports at reduced rates under the Most Favoured Nation (MFN) regime will swallow up the domestic textile sector.

Echoing similar concerns first raised by farmers on imports of India’s agricultural produce, the ministry says that the Indian textile industry enjoys “huge” subsidies and tariff protection, which will lead to imbalances in the market and affect Pakistani farmers. It has argued that India and Bangladesh have realised the importance of the textile sector in their economic development, growth of exports and generation of employment and therefore protect their industry. The ministry says that Pakistan should also protect its textile sector, which it fears will be “destroyed” after the entrance of Indian goods into domestic markets.

“We have still not been able to export more than $272 million worth of goods to India, whereas India has exported around $1.5 billion worth of commodities to Pakistan, being allowed 1,900 tariff lines,” the textile ministry said in its comments on trade with India after the grant of the MFN status. It added that Pakistan exported only $45 million worth of textile products to India in 2010, whereas India exported $566 million worth of textile products to Pakistan while the negative list was still in force.

Under the South Asian Free Trade Area (Safta) agreement, tariff rates are to be held between 0%-5% on all products not on a country’s sensitive list. Initially, Pakistan had 1,183 tariff lines on the sensitive list, out of which 293 pertained to textile products. Recently, the Ministry of Commerce whittled the sensitive list by 20% and the sensitive list now contains only 242 textile tariff lines. The Ministry of Textile Industry is worried that there is no indication that India or Bangladesh have done the same, or intend to do so.

“Almost all textile lines in which Pakistan has export potential are itemised in India’s sensitive list. Other than this, India has kept high non-ad valorem duties on most textile products (around 700 tariff lines) which form barriers to Pakistan’s exports,” the textile ministry cautioned. The textile ministry also alleged that India’s multilayered tariff system damages Pakistan’s export prospects to the country.

“India has huge state-owned textile mills and cotton trade. India has also banned the export of cotton, which results in lowering the cost of cotton for Indian textile industries and losses for Pakistani importers of cotton,” the textile ministry additionally noted.

The textile ministry has said that a tariff level for trade with India should be computed scientifically to ensure optimal rates. The ministry also warned that as far as trade defence mechanisms are concerned, Pakistan may have laws in place, but the country has limited experience in handling anti-dumping measures and limited resources to implement protective policies.

“A highly-skilled, well-budgeted and resourceful organisation, along with an organised domestic sector, may take years to develop. Till such time, there will be no mechanism available for the defence of the domestic sector,” the textile ministry says.

It also claimed that the private sector lacks the capacity to initiate or develop a strong case to invoke trade defence laws on the basis of a decrease in capacity utilisation and or loss in domestic market share, as no reliable data has been maintained as far as local production and sales is concerned. Recourse to such data is an important requisite for any kind of defensive action under the World Trade Organization’s laws.

On the other hand, the Indian textile industry – which is the second largest in the world – is enjoying a large protected domestic market, which ensures economies of scale, said the ministry. It said it fears the opening of borders will just increase the outreach of Indian textiles under the umbrella of SAFTA tax regimes.

Published in The Express Tribune, November 22^nd, 2012.

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Indian tomatoes flooding Pakistan

Lured by high profits, Indian traders are flooding the Pakistan market with tomatoes, affecting domestic supplies and pushing up prices back home. Truck loads of tomatoes sourced from Delhi and Nashik are entering Pakistan through Attari-Wagah border in Amritsar daily, traders said.

“As many as 80-90 trucks of tomatoes (each carrying about 16 tonnes) are crossing Attari-Wagah border every day,” Rajdeep Singh Uppal, vice-president, Amritsar Export Association said. This has been happening for over two weeks, he said, adding that the trend is expected to continue for a month. Rajendra Sharma, a member of Delhi agriculture marketing board, said supply of tomatoes to Pakistan is one of the reasons for continued high retail prices of the vegetable in Delhi at Rs 20-25 a kg.

Rajendra Chug, general secretary of Delhi’s Azadpur market (Asia’s biggest vegetables & fruits market) said that on average 10-12 trucks laden with tomatoes are heading for Pakistan everyday.

Uppal and C ug said rush of tomatoes to Pakistan is triggered by relatively high prices there because of damage to the crop due to floods in the key producing Sindh region. Chug said the Indian tomato is selling between Rs 25-30(Indian currency) a kg in Pakistan. The price of the same vegetable inDelhi stood from Rs 8-15 per kg in wholesale, traders in the Azadpurmarket said. Uppal said Indian tomato is selling for around USD 350-400(Rs 17,850-Rs 20,400) per tonne in Pakistan. Ajit Shah, president ofMumbai based agriculture export association said around 100-125 tonnesof tomatoes from Nashik is finding its way to Pakistan by road throughWagah.

R P Gupta, director, NHRDF (established by agri- cooperative Nafed for research and improving productivity of agri crops) said tomato production reaches a high level in the Nashik district of Maharashtra between September and October. It is also the only region during the period to produce the staple vegetable. Key tomatoes producing regions like Nashik, Pune and Ahmadnagar provide the supplies to the entire northern region including Delhi during the period, Gupta said. The mild climate in the region during this period is best suited for cultivation of tomatoes, the NHRDF (National Horticulture Research and Development Foundation) director said. Nearly 2,000 tonnes of tomatoes are arriving in Pimpalgaon market yard daily, Gupta said.

Source: timesofindia.indiatimes.com

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Indian tomatoes flooding Pakistan

Lured by high profits, Indian traders are flooding the Pakistan market with tomatoes, affecting domestic supplies and pushing up prices back home. Truck loads of tomatoes sourced from Delhi and Nashik are entering Pakistan through Attari-Wagah border in Amritsar daily, traders said.

“As many as 80-90 trucks of tomatoes (each carrying about 16 tonnes) are crossing Attari-Wagah border every day,” Rajdeep Singh Uppal, vice-president, Amritsar Export Association said. This has been happening for over two weeks, he said, adding that the trend is expected to continue for a month. Rajendra Sharma, a member of Delhi agriculture marketing board, said supply of tomatoes to Pakistan is one of the reasons for continued high retail prices of the vegetable in Delhi at Rs 20-25 a kg.

Rajendra Chug, general secretary of Delhi’s Azadpur market (Asia’s biggest vegetables & fruits market) said that on average 10-12 trucks laden with tomatoes are heading for Pakistan everyday.

Uppal and C ug said rush of tomatoes to Pakistan is triggered by relatively high prices there because of damage to the crop due to floods in the key producing Sindh region. Chug said the Indian tomato is selling between Rs 25-30(Indian currency) a kg in Pakistan. The price of the same vegetable inDelhi stood from Rs 8-15 per kg in wholesale, traders in the Azadpurmarket said. Uppal said Indian tomato is selling for around USD 350-400(Rs 17,850-Rs 20,400) per tonne in Pakistan. Ajit Shah, president ofMumbai based agriculture export association said around 100-125 tonnesof tomatoes from Nashik is finding its way to Pakistan by road throughWagah.

R P Gupta, director, NHRDF (established by agri- cooperative Nafed for research and improving productivity of agri crops) said tomato production reaches a high level in the Nashik district of Maharashtra between September and October. It is also the only region during the period to produce the staple vegetable. Key tomatoes producing regions like Nashik, Pune and Ahmadnagar provide the supplies to the entire northern region including Delhi during the period, Gupta said. The mild climate in the region during this period is best suited for cultivation of tomatoes, the NHRDF (National Horticulture Research and Development Foundation) director said. Nearly 2,000 tonnes of tomatoes are arriving in Pimpalgaon market yard daily, Gupta said.

Source: timesofindia.indiatimes.com

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Pakistan may Start importing Indian Tractors next year

Unlike a lot of industries, the local tractor industry is not war of opening of trade with India. In fact, it is looking forward to it. Universal Traders are in talks with an Indian counterpart to start importing tractors to Pakistan once the negative list is phased out and trade with India opens up next year.

Escorts Limited and Universal Tractors of Pakistan will collaborate next year to import 7,500 tractors. It is interesting that the two companies have been working together since 2003. However because of the ban on imports from India, these tractors were being imported from sister concerns of the Indian company from Norway and the US, at much higher cost.

The two companies are now hopeful that with the removal of the negative list tractors will be legally imported from India which will also help in combating smuggling.

The tractors will not be imported as a CKD and assembled in Pakistan. The assembly plant was commissioned under the tenure of former prime minister Shaukat Aziz and is already at an advanced stage of completion. Rajiv Kumar, Head of Exports at Escorts Limited spoke to The Express Tribune said that his company is already exporting to over 60 countries. Kumar also said that the company was initially set up in partnership with Ford in the 1960s. Ford left India in 1996 and since then the company is a full-fledged Indian enterprise. The company started off with an annual production of 20,000 tractors which has now gone up to 80,000. Basically this means that an Escorts tractor is manufactured every four minutes. The total Indian market for tractors is 650,000 a year.

Kumar also said that where Indian tractors would prove beneficial in overcoming the shortfall in the demand for tractors in Pakistan, there was no reason why Pakistani tractors could not make a foothold in the vast Indian market. He also spoke about the possibility of assembling in Pakistan for further onward exports.

Managing Director of Universal Tractors Pakistan, Muhammad Iqbal told The Express Tribune that they had imported 100 Indian tractors since 2003 through their European and American enterprises. He further said that once the negative list was phased out they planned on importing 28,500 tractors over the next three years. Iqbal also said that with the shortfall in demand of 20,000 tractors annually in Pakistan, imports from India would benefit agriculture. He said that Indian tractors were not more expensive than local tractors and would become even cheaper after local assembly.

Iqbal said that at present Pakistan needed 650,000 tractors immediately. He also said that the transport of tractors would be cheaper because of easy access from Wagah border.

Published in The Express Tribune, December 15th, 2012.

Read More

Pakistan may Start importing Indian Tractors next year

Unlike a lot of industries, the local tractor industry is not war of opening of trade with India. In fact, it is looking forward to it. Universal Traders are in talks with an Indian counterpart to start importing tractors to Pakistan once the negative list is phased out and trade with India opens up next year.

Escorts Limited and Universal Tractors of Pakistan will collaborate next year to import 7,500 tractors. It is interesting that the two companies have been working together since 2003. However because of the ban on imports from India, these tractors were being imported from sister concerns of the Indian company from Norway and the US, at much higher cost.

The two companies are now hopeful that with the removal of the negative list tractors will be legally imported from India which will also help in combating smuggling.

The tractors will not be imported as a CKD and assembled in Pakistan. The assembly plant was commissioned under the tenure of former prime minister Shaukat Aziz and is already at an advanced stage of completion. Rajiv Kumar, Head of Exports at Escorts Limited spoke to The Express Tribune said that his company is already exporting to over 60 countries. Kumar also said that the company was initially set up in partnership with Ford in the 1960s. Ford left India in 1996 and since then the company is a full-fledged Indian enterprise. The company started off with an annual production of 20,000 tractors which has now gone up to 80,000. Basically this means that an Escorts tractor is manufactured every four minutes. The total Indian market for tractors is 650,000 a year.

Kumar also said that where Indian tractors would prove beneficial in overcoming the shortfall in the demand for tractors in Pakistan, there was no reason why Pakistani tractors could not make a foothold in the vast Indian market. He also spoke about the possibility of assembling in Pakistan for further onward exports.

Managing Director of Universal Tractors Pakistan, Muhammad Iqbal told The Express Tribune that they had imported 100 Indian tractors since 2003 through their European and American enterprises. He further said that once the negative list was phased out they planned on importing 28,500 tractors over the next three years. Iqbal also said that with the shortfall in demand of 20,000 tractors annually in Pakistan, imports from India would benefit agriculture. He said that Indian tractors were not more expensive than local tractors and would become even cheaper after local assembly.

Iqbal said that at present Pakistan needed 650,000 tractors immediately. He also said that the transport of tractors would be cheaper because of easy access from Wagah border.

Published in The Express Tribune, December 15th, 2012.

Read More