The move Wednesday to improve trade ties comes just ahead of an expected meeting between the two countries’ prime ministers at a regional summit in the Maldives, where officials hope more progress can be made.
“It is a positive step forward,” said Indian Commerce Minister Anand Sharma, adding that an improved economic climate would bolster the peace process. “It will help us in economic engagement, which has enormous potential and augurs well for the entire region.”
Islamabad has looked increasingly isolated in recent months, its relations deteriorating with the United States and souring with its western neighbor Afghanistan. In that context, acrimonious relations with India have seemed less attractive.
“Pakistan’s strained ties with the United States has pushed it to look for more foreign policy options, to go for increasing ties with friendly states in the neighborhood like China, and also to improve the relations with nuclear neighbor India,” said Hasan-Askari Rizvi, a Pakistani political and defense analyst.
The Federation of Indian Export Organizations said trade could double from current levels of about $2.7 billion a year simply by the rerouting of goods currently sent via Dubai, the United Arab Emirates, and through other channels. But the Confederation of Indian Industry cautioned that roadblocks such as stringent visa rules, non-tariff barriers and communications problems still need to be dismantled and more trade routes opened up.
Uday Bhaskar, an Indian defense and security analyst, gave the decision “two cheers,” reserving full judgment until MFN status is properly implemented “and I see trucks piling up at the border.”
Sundeep Waslekar of the Strategic Foresight Group in Mumbai said there was no sign of a strategic shift in thinking on either side of the border.
“This is a confidence-building measure rather than a conflict-resolution measure,” he said. “But anything that can reduce the trust deficit, I welcome as a citizen of South Asia.”
The two countries have fought three wars since 1947, two of them over the Himalayan region of Kashmir.
Denyer reported from New Delhi.
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