Manufacturing Industry Analysis

Engineering industry: Trade liberalization with India, especially for iron ore will place the engineering goods industry of Pakistan at a significant advantage by bringing down prices of steel by over 70 per cent and that of finished engineering goods by 10 to 20 per cent. At present, Pakistan imports iron ore at a high cost from Brazil and Australia.

Transport equipment: As a consequence of the high protection provided to domestic auto assemblers (two and four wheelers), prices paid by Pakistan consumers are substantially higher than comparable international prices. Pakistan-produced scooters, motorcycles and under-1000 cc passenger cars are priced 50 per cent higher than in India. Bicycles are another category where Indian products would

However, Pakistan has never imported more than 1.5 per cent of its total tea imports from India. It has been sourcing most of its tea from other countries like Kenya. The cost of not trading with India is high as Indian tea is competitively priced in the international market and is also perceived as being of high quality.

Pharma: Considering that Indian pharmaceutical products are 30 per cent cheaper than Pakistani products, it would certainly make a difference to the common citizen in that country.

Textile machinery: In Pakistan, there is no high-tech textile machinery industry. The opening of trade with India would help Pakistan to acquire this machinery directly at much lower prices rather than high-cost machinery from Germany.

Tyres: The size of the market for tyres is about 1 million annually and production facilities exist for only 2 lakh tyres. Therefore, Indian truck tyres are popular products in Pakistan. Though the item has been placed on the open import list, the high duty structure would make Indian tyres officially costlier in

Agriculture: This industry has one of the highest economic multiplier effects among the various industries, even ahead of telecom or power. Liberalized Indo-Pakistan trade in the agro sector would generate around 2.7 lakh jobs in India and 1.7 lakh jobs in Pakistan.

Though restrictions on trade, policy impediments and an uncertain political situation have affected official trade, it is estimated that unofficial trade between India and Pakistan stands anywhere near $ 1 billion, which is five times the value of official trade ($ 200 million) between the two countries.

Moreover, the actual value of unofficial or irregular trade may exceed $ 1 billion a year if supplies of Indian-made textiles machinery, spares and equipment and machine tools of Indian origin being used in Pakistan foundries but not directly imported from India are taken into account.

Orders for these goods are placed in Dubai, Hong Kong or Singapore and the goods are then re-exported to Pakistan from there. Although the operation is circuitous, it is economical when compared with regular import of similar items from Japan, Western Europe and