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MFN Status to India: Repercussions for Pakistan

No sane mind can deny this fact that for the stability, prosperity and development, establishment of long-lasting peace in the region, normalization between India and Pakistan is indispensable.

The contested issues between both countries have led them to engage in an arms race to subdue each other, meet security dilemmas and to maintain deterrent capabilities. With an utter neglect towards social sectors, defense of both states has been gnawing lion’s share of their respective national exchequers right from the very inception. This situation has become more dismal and startling especially in the wake of natural catastrophes and population explosion.

But, on the other hand, it is also essential that strategic decisions made without going through necessary calculations and a proper cost-benefit analysis can produce dire and ever-lasting consequences for state’s wider interests. Pakistan government’s recent decision to grant India the Most Favoured Nation (MFN) status is also one of the strategic decisions and must not be taken without thorough study.

India though granted the same status to Pakistan in 1996, imposed non-tariff barriers to cripple the access of Pakistani products to Indian market. As a result of which, out of total India-Pakistan trade volume i.e. $1.4 billion, Pakistan’s export to India in the year 2009-10 remained $268 million while India exports to Pakistan was elevated to $1.2 billions. This trade imbalance Pakistan is already facing despite not granting India with MFN status and no rocket-science is required to gauge the gravity of the impact if the anticipated status is bestowed to India. Similarly, the number of importable products, which India allowed Pakistan to it were 850, while Pakistan allowed non-MFN India 1945 items to export it. After this decision is implemented, Indian exports to Pakistan will increase manifold and India will flood its products into Pakistani market of which Pakistan’s energy-stricken nascent industry will never be able to compete, thus sooner or later meeting its tragic end.

Then if one makes a comparative analysis of the agriculture sectors of both the states, one can assess the huge difference present between the both due to asymmetry of subsidies extended to the farmers of the respective states and unequal availability of water resources. Prices of fertilizers, availability of modern machinery, energy resources for electric tube-wells and above all allocation of budget for the sector are the areas in which Pakistan is far behind India to match. Especially the scarcity of water and the pace, with which this deficiency is making its way, is really alarming.

If Pakistan grants this controversial status without first addressing the concerns and filling the gaps will make Pakistan potent and Pakistan will deprive most of the leverages it already enjoys. This decision will also assist India to plead its case in the comity of nations for UNSC permanent membership. In short, pursuit of this decision by present government without necessary homework is just like pushing the nation into the swamps of slavery where there are no strong footings.

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