Pakistan allows more imports from India as ties improves

[Maulik]

Pakistan allows more imports from India as ties improve


Published: NovembeECr 12, 2011


ECC approves addition of 12 goods in positive list of items that can be imported from India: Official.

ISLAMABAD: Pakistan removed restrictions on the import of 12 goods from India as part of measures to normalise trade between the nuclear-armed rivals, Pakistani officials said on Saturday.
Pakistan has long been reluctant to open up trade with its neighbour because of long-running political disputes, particularly over the Kashmir region. But both countries have been trying to boost their trade following a recent thaw in ties.
Lasting peace between the rivals is seen as essential to South Asian stability and to helping a troubled transition in Afghanistan as NATO-led combat forces plan their military withdrawal from that country in 2014.
Pakistan last week said it would grant India most-favoured nation (MFN) trade status that would help normalise trade by ending huge restriction. India gave MFN status to Pakistan in 1996.
Pakistan’s Commerce Ministry recently requested the Economic Coordination Committee (ECC), the top decision-making body on economic affairs, to increase the number of items that can be imported from India.
“The ECC met on Friday and approved the addition of 12 goods in the positive list of items that can be imported from India,” a ministry official said.
Another official said the goods included machinery and raw materials for the leather and textile industries.
The decision came as senior commerce officials of the two countries prepare to meet early next week in New Delhi to explore ways to boost bilateral trade.
Despite having a combined population of more than a billion, Pakistan and India’s official bilateral trade stood at $1.4 billion in 2009/10 while an estimated $3 billion unofficial trade is routed through third countries in the Gulf.
Indian Foreign Secretary Ranjan Mathai said on Thursday the two countries would take the process of normalisation of trade to its “logical conclusion” and India would also work towards a preferential trade agreement with Pakistan and easing of visa restrictions for businessmen.
Pakistan and India have fought three wars, two of them over the Himalayan region of Kashmir, since their independence in 1947 but their relations have improved since they resumed a dialogue in February that was derailed by an attack by Pakistan-based militants in the Indian city of Mumbai in 2008.
Pakistani Prime Minister Yousaf Raza Gilani and his Indian counterpart Manmohan Singh hailed progress in diplomatic ties and promised a “new chapter” in ties when they met on the sidelines of a regional summit in the Maldives on Thursday.

[Maulik]

India initiates major free trade move in SAARC

Addu: In a major boost to its trade liberalisation effort, India yesterday reduced its sensitive list for least developed countries to 25 from 480 and said zero basic customs duty access would be given to all the removed items.
"I am happy to announce that, in a major trade liberalisation effort, the government of India has issued a notification to reduce the sensitive list for the least developed countries under the South Asian Free Trade Area Agreement from 480 tariff lines to 25 tariff lines," Prime Minister Manmohan Singh, in his address at the South Asian Association for Regional Cooperation (Saarc) summit, to loud applause.
"Zero basic customs duty access will be given for all items removed with immediate effect," he added.
‘Free growth'

Under the Safta agreement, member countries are allowed to retain a ‘sensitive list' that are not offered for concessional treatment. Now least developed countries like Bangladesh, Bhutan and Nepal will have increased access to Indian markets. Tariff line refers to a category in a country's tariff schedule.
Singh said he recognised that non-tariff barriers were an area of concern. "India is committed to the idea of free and balanced growth of trade in South Asia. Competition begins at home. Our industries have to learn to compete if our economies are to have a future in this globalised world that we live in," he said.
As per the Safta agreement, non-LDCs that include India, Pakistan and Sri Lanka, are required to reduce their tariff to five per cent by 2013, while LDCs are required to reduce tariff to this level by 2016.
For non-LDCs India maintains 865 tariff lines under sensitive list while Pakistan has 1,169 items. Among the other members Sri Lanka has 1,065; Bangladesh 1,254, Bhutan 157; Maldives 671 and Nepal 1,313 tariff lines under sensitive list.
Noting that all South Asian nations could benefit from the respective comparative advantages, he said these include the hydropower and natural resource endowments, possibilities of earnings from transit, marine resources, scientific and technological base and above all young population, which will drive consumption and investment in the years ahead.
‘Uncalled for burden'
"We should expedite the finalisation of the Saarc Agreement on Investment," he told the heads of states and governments of the eight member-nations.
Pointing out that the Saarc summit had come at a time when the global economy was under acute stress, Singh said this had imposed "a fresh and entirely uncalled for burden" on the region's development efforts.
"We hope the leaders of the major economies, particularly in the Eurozone, will show the wisdom and will that are required to revive the global economy," he said. Singh last week ago attended the G20 meet at Cannes in France, where the Eurozone issues drew much attention.
"The world economy is going to take time to recover. In the meantime, developing countries like ours will be squeezed for capital, investments and markets for our exports," he said.

gulfnews : India initiates major free trade move in SAARC

[Maulik]

IMPORTING ELECTRICITY FROM INDIA

Pakistan's Prime Minister Syed Yousuf Raza Gilani has said that he will ask his counterpart Manmohan Singh to help Pakistan overcome its energy crisis and facilitate imports of electricity to the country, in a meeting scheduled on the sidelines of regional conference in Maldives this month.

According to a press communiqué, the premier said he would meet Indian premier on the sidelines of south Asian association for regional cooperation (SAARC) conference and deliberate on issues that are for the mutual benefits.

"If the modalities are appropriately worked out between the two counties, the proposed grid could contribute to reducing power shortage," Xinhua reported Gilani as saying.
"We have agreed to erect a 500kv system of transmission for this trans-border electricity supply. Pakistan contended that it was not feasible for importing less than 500 mw of electricity on this system."

POWER WOES

Pakistan is facing the worst kind of energy deficit in its history. Industries including small and large-scale companies have to trim their production volume to meet the challenge or arrange costly substitutes to keep the production level sustainable. Domestic consumers are confronted with more than half a day load shedding daily and undergo inflated electricity bills that are adding insults to their injuries. High cost of production is presented as a samey justification behind constant surge in electricity tariffs with concerned authorities and departments lethargic to find appropriate alternatives to give relief to the inflation-hit consumers.

It should be noted that the import, if materialised, could not resolve the country's power deficit with the shortfall nearing 5,000 megawatts. This can only be complemented by realization of other dream projects such as Iran-Pakistan gas and hydroelectricity.

A 500mw is an insufficient quantity in view of national power shortfall. Even if that will be 1,000mw as media reports suggest deficit will still be large. Nonetheless, it will provide some support to energy sector of Pakistan and that will so in a short span of time.
Contrasting IP project that is a pipedream and execution of which has to jump the political obstacles, importing electricity is the easiest and fastest means of coping up with the challenges of shortfall since it does not need as such capital investments on the infrastructure developments. Similarly, mega dam projects that include much-hyped Diamer Bhasha dam have an overstretched gestation period, albeit Diamer Bhasha, once constructed, is expected to add 4,000mw electricity right away.

Imported electricity can provide immediate solutions to the power crisis. It will lessen the burden on gas sector that also reels under energy shortfall due to supply of gas to the power plants.

Alternative electricity production arrangement or import of electricity straightaway from neighbouring India will save gas for other needy sectors such as fertiliser makers and textile industry. Gas is the prime source of power generation in the country causing its shortage to other energy-starved sectors. As the winter has just arrived, analysts are fearing worst kind of gas shortage in the country.

On one hand, the industries are suffering from lethal power shortage and gas unavailability to urea plants is thwarting industrial production on the other.

Indian electricity is expected to reduce the gap in demand and supply in the central parts of the country.

Experts call for back-to-back grids between the two countries so that widening demand and supply gap in the whole country can be plugged.

INDIA'S POWER SECTOR

Indian energy mix is dominated by thermal sources (coal, gas, and oil) that account for 65 per cent of total power generation, followed by hydropower (21 per cent), nuclear (three per cent), and renewable energy sources (12 per cent). The Indian government has devised a plan to meet 25 per cent of the country's need through nuclear technology by 2050. It is expected that 20,000 MWe nuclear energy would be online by 2020 and 63,000 MWe by 2030.

India has discovered the indigenous civil nuclear technology in the wake of a ban on its dealing in uranium and related materials. Therefore, it is said that even if it is disbanded from importing uranium from central Asian states mainly Kazakhstan, its nuclear capacity expansion program would not be thwarted because of its indigenous thorium resources.

Coal is the prime source of power production in India fuelling approximately 55 per cent of its power generation. The current issue faced by its power sector is not coal scarcity but 'capacity shortage', experts opine. Increase in power generation will require improvement in handling capacity at ports with regard to imported coal and transportation across the nation to carry coal from one place to another. Shortage of coal has been reported in few coal-based power plants.
Instead of waiting for the nuclear technology to replace the dominant energy constituent, India may be more interested in further capitalizing on the existent coal-combusted power generation plants.

Pakistan possesses unexplored bonanza of coal reserves and understandably would be helpful for India to push up its generation and reduce its energy deficit. According to India Energy Handbook 2011, the national energy requirements stand at 969 Twh while availability is 821 Twh.
Tariff is something that will determine the viability of import. Negotiations are said to have already kicked off and both the countries seem strong-minded this time to iron out the differences.
Import of electricity will get the cash-starved economy of Pakistan rid of adventures taken on and off such as rental power plants. Blatant corruption characterises the power sector of the country. Successive governments have remained indifferent to the misappropriation of public money in the name of power production and transmission. Contracts are awarded at whims without considering the capabilities of the contractees.
While these issues should be resolved, yet the affordable power needs to be injected in the system to slash the agonizing deficit caused due to underproduction.

IMPORTING ELECTRICITY FROM INDIA - Power Engineering