New Delhi, Aug 8 () : Economic ties between India and Pakistan would be on a reverse gear after the latest ambush of an Indian patrol resulting in death of five jawans and an officer.
The most favoured nation issue, which is Indian trade demand that gives more access to Pakistan market will now will be delayed more as talks with Pak PM scheduled for two months from now would even be distant. Most Favoured Nation (MFN) status due in December last was postponed due to impending election in Pakistan. The decision was to taken by the new elected Govt.
Talks on economic ties was to come in January but the beheading of an Indian soldier got this postponed. The following month saw another Indian soldier being killed. Trade communities decided to keep business away from the border skirmish and much was to come out of the India PM-Pak PM meet.
Now, the situation has got bigger with BJP and other parties ruling out any talks after the present killing. UPA too has decided to call off talks. PM Nawaz Sharif was important as the commerce portfolio is with the latter. A high-powered trade team led by Hero MotorCorp Sunil K Munjal visited Islamabad in June to talk about investments across the border. The delegation’s theme was that if investments flowed across borders, then the hostility would disappear.
In September at New York, the UN General Assembly Conference starts and the PM of both countries would attend. It was expected that they would have a talk to clear many economic issues including the MFN issue. The process of resuming economic ties was started in February 2011 between two nations that are equipped with nuclear weapons.
Easy visa for businessmen travelling across the border and quick clearance for goods at Wagh post were some of the new relaxations. The delay in normalization of ties will hurt trade as the MFN would give Indian goods easy access to growing Pakistan markets at competitive rates as import duty would come down. Indian consumer goods are sold in Pakistan through smugglers.