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An Appraisal of Pakistan-India
Relations
 More than six decades after independence,
Pakistan-India relations are less extensive than
were those between the United States and the
Soviet Union at the height of the Cold War.
 Since Independence, Pakistan-India relations have
been under the shadows of suspicions,
misunderstandings, tensions and wars. Both states
never succeeded to win the mutual interests of
each other because of their unresolved disputes,
myopic approach and lack of co-operation.
 Pakistan-India Relations can be best described
as one step ahead and two steps backward.
 India has been seen as continually seeking
regional hegemony thus always creating a
threat of insecurity for Pakistan.
 India strives to impose systemic Unipolarity
whereas Pakistan seeks to maintain Bipolarity.
Thus ensuing divergence of structural interests
creates conflict prone regional dynamics.
 For India regional Unipolarity is essential to
ensure the emerging Asiatic systemic position.
 For Pakistan regional Bipolarity is essential to
ensure state survival.
 India’s hegemonic interests, uncontested regional
power, greater global influence and ill will towards
Pakistan by growing aggregate power base
increase Pakistan’s perception of existential threat.
 Kashmir and water remain the dangerous flash
points between India and Pakistan.
Kashmir Issue:
Historical Background and Constitutional Framework
Governing IHK
There were about 562 Princely States, which existed
under the overall paramountcy of the British Crown.
The Cabinet Mission, in its statement of May 16,
1946, clarified that ‘Paramountcy could neither be
retained by the British Crown nor transferred to the
new Government’.
Kashmir Issue:
In Section 7 of the Indian Independence Act, 1947,
it was stated that ‘ the suzerainty of His Majesty over
the Indian States lapses.’ Thus, legally the Princely
States became independent.
The last British Viceroy Lord Mountbatten, during
his address to the Chamber of Princes on July 25,
1947, asserted that ‘the rulers were technically at
liberty to link with either of the dominion (India or
Pakistan).
Kashmir Issue:
 As regards the criteria to be followed, Viceroy held that
‘normally geographical situation and communal interests and
so forth will be the factors to be considered.’
Princely States were, therefore, free to join either of the two
Dominions or to remain independent.
 By August 15, 1947, the majority of the Princely States,
owing to their geographical contiguity and Hindu population,
joined India while only ten joined Pakistan.
Kashmir Issue:
Jammu and Kashmir State had a Muslim majority population,
under a Hindu ruler who was in favour of remaining
independent.
The Muslim majority population of Jammu and Kashmir
was in favour of joining Pakistan.
In end of July1947, the Maharaja ordered the Muslims to
surrender their arms to the police, and communal violence
erupted.
 In the Jammu province, hundreds of Muslims were
massacred by the Hindus and Sikhs, who attacked Muslim
villages.
Kashmir Issue:
In August 1947, on the eve of Partition, Poonch revolted
against the Maharaja’s rule and in September 1947, the
Muslim population liberated the area from the State Police.
In October 1947, there was a revolt by the Muslim
population against the Maharaja. He fled from the capital
Srinagar to Jammu on October 26, 1947, and appealed to India
for help.
India claims that the Maharaja signed the ‘Instrument of
Accession’ on October 26.
Kashmir Issue:
In January 1950, India accorded a ‘special status’to the State
through Article 370 of the Indian Constitution. Under the said
Article three subjects, namely defence, external affairs and
communications only were to be dealt by the Indian
Parliament.
In February 1954 the Kashmir Constituent Assembly, while
adhering in principle to the special position of the State,
confirmed the legality of its accession to India.
Kashmir Issue:
In 1954, the president of India promulgated a Constitutional
Order, empowering the Indian government ‘to legislate on all
matters on the Union List, not just defence, foreign affairs and
communications.
In November 1956, the Constituent Assembly of IHK finalized
the Constitution of the State.
The UN Security Council in its Resolution 122 of Jan 24, 1957,
affirmed that the ‘final disposition of the State of Jammu and
Kashmir will be made in accordance with the will of the people
expressed through the democratic means under the auspices of
the UN.
Kashmir Issue:
Contemporary Indian Government’s Agenda
Suppress the cause of Kashmir’s freedom by means of
'undemocratic and coercive' attitude and policy
Demographic change by bringing and settling Kashmiri Pandits in
exclusive colonies against the spirit of Article 370 of the Indian
Constitution under which Indian Held Kashmir enjoys a special
status and integration of the state into the Indian Union.
Legal Protection (unbridled power) to the Indian troops in the
guise of the Armed Forces Special Powers Act (AFSPA)
Kashmir Issue:
Contemporary Indian Government’s Agenda
On 20 Friday 2015 , the high court in Indian Held Kashmir
ruled that that the special status guaranteed to India-held
Kashmir under Article 370 was permanent.
The judges said the “limited sovereignty” it enjoyed was
“beyond amendment, repeal or abrogation”. This decision
constitutes a rebuff to the hard-line BJP government’s attempt
to alter the facts.
Way Forward:
Proactive diplomacy on Kashmir on all international fora should be
pursued.
Pakistan should not encourage calls for active support of armed,
banned, militant groups in Kashmir.
Allaying international concerns of not doing enough to tackle Alpha
Elements working for the Kashmiri Cause, by monitoring and taking
action against violent armed groups
Water Issue:
Historical Background of Indus Water Treaty
On 1st April 1948, India stopped the delivery of water
from the Ferozepur headworks to Dipalpur Canal and to
main branches of the Upper Bari Doab Canal and denying
water to some 5.5% of the sown area and almost 8% of the
cultivated area.
Agriculture of Pakistan of Pakistan almost dependent on
water of Indus Basins River.
On 4th May 1948, India agreed to the Inter-Dominion
Agreement with Pakistan.
Water Issue:
The agreement allowed for the continuation of water
supplies for irrigation purposes until the Pakistani side
managed to develop alternative water resources.
World Bank sponsored several rounds of talks in
Washington from 1952 to 1960.
In 1960 Indus Water Treaty was signed i.e. the division
of water between India and Pakistan brokered by the
World Bank.
Water Issue:
The Indus System of Rivers comprises of three Western
Rivers the Indus, the Jhelum and Chenab and three
Eastern Rivers - the Sutlej, the Beas and the Ravi
The treaty gives India exclusive use of all of the waters
of the Eastern Rivers and their tributaries before the point
where the rivers enter Pakistan.
The treaty gives Pakistan exclusive use of the Western
Rivers- the Indus, the Jhelum and Chenab.
Water Issue:
Indus Water Treaty is the best treaty which the two
rivals could get at that time .
Under the Indus Water Treaty, India is not permitted to
build dams for the purpose of water storage on the Indus,
Chenab and Jhelum rivers, but it is allowed to make
limited use of their water, including developing run of the
river hydroelectric power projects.
Water Issue:
Violations of Indus Water Treaty by India
Construction of illegal reservoirs like Wullar Barrage,
Baglihar Dam, Kishanganga Hydro Electric Power
Project vitiate the clause of treaty.
In 1970s, India started the construction of Sallal hydro
project on Chenab River.
Pakistan objected the construction of this project, after a
series of meetings, the issue got resolved through
agreement between the two governments in April, 1978.
Water Issue:
In 1984, India announced plans to build the barrage, The
Wullar Barrage, which Indian refers to as Tulbul
Navigation project on the Jhelum River at the mouth of
Wullar Lake was the second Indian project that became
controversial and still remains unresolved.
Baglihar, located on Chenab river was the third Indian
project that became controversial. The International Court
of Arbitration gave a verdict in favour of India due to
weak Pakistan’s position.
Water Issue:
After Baglihar, India and Pakistan have got locked in a
dispute over the configuration of Kishanganga
hydroelectric project . On February 18th
2013, the
International Court of Arbitration gave a partial award in
response to Pakistan’s appeal over India’s Kishenganga
project, allowing India to divert waters from the Neelum-
Jhelum river but restraining drawdown flushing
techniques.
Water Issue:
Omissions and Challenges in the Treaty
The treaty permits India to use the waters of the western
rivers for irrigation and hydropower projects but it does not
call for an examination of the cumulative effects of a cascade
of such projects.
The issue of the quality of water being affected by pollution
due to toxic industrial waste was not considered in the treaty.
Lack of operational capacity did not let Pakistan take full
advantage of the Indus Water Treaty which served India’s
interests better.
Water Issue:
The Treaty is silent about.
a)How much water can be diverted through those
projects.
b)And in which season.
The Indus Commission hasn’t played an effective role as
envisaged in the treaty. All disputes have been settled by
the courts of arbitration.
Issues of climate changes and groundwater management
were not mentioned when the treaty was being
formulated.
Water Issue:
These include the rapid melting and recession of the
Hindukush-Himalayan glaciers, disruption in monsoon
pattern that replenished river flows and aquifers; increase
in the number, duration, and severity of floods or
droughts as well as higher temperature.
Pakistan, at present, has water storage capacity of just 9
percent (30 days) against international average capacity
of 40 percent.
Water Issue:
Need to re-envisage the Treaty.
Need to initiate a serious dialogue on strengthening the
dispute resolution mechanism of the Indus Water Treaty.
Need to develop plans of action for co-operation on water-
related challenges.
The long-term water security of India and Pakistan, which
is closely linked to their food and energy security, can only
be achieved if they can muster the necessary political will
to establish mutually beneficial co-operation on water
resources.
Water Issue:
Need to establish a joint Sophisticated Forecasting System, That
will allow for real time data sharing regarding the flow of water in
the rivers and tributaries of the Indus Water System. This data must
be shared through the website that include three dimensional
models of dams.
There should be a permanent liaison between Ministry of Water &
Power and Ministry of Foreign Affairs in order to promote
informed decision making on water related issues with India.
Pakistan should actively highlight the violation of Indus Water
Treaty by India on international forums by drawing attention
towards the humanitarian aspects.
Trade between India and Pakistan: Potentials and
Pitfalls
Economic co-operation and trade is the best way to darn
relations between two countries.
Economic integration and trade was the basic
dynamic which brought peace and prosperity in Europe
after 2nd
World War.
Free markets and trade, common value of tolerance and
understanding can re-invent the relations.
Economic integration could yield a Peace Dividend
between both states.
Trade between India and Pakistan: Potentials and
Pitfalls
“Customs unions and other systems of closer commercial
relations could serve as the means to the improvement of
political relations and the maintenance of peace.”
Economist Wilfred Pareto
By economic and trade cooperation with India, Pakistan
can gain a huge market of more than one billion people.
The lower in transportation and transaction cost of trade
will benefit the business industry of both countries.
Trade between India and Pakistan: Potentials and
Pitfalls
Pakistan, by allowing Transit facilities over land to India for
its trade with Afghanistan, could gain enormous economic
benefit.
Pakistan’s Non Discriminatory Market Access (NDMA) to
India will lead to a mutually beneficial trade relationship if:
a)India agrees to gradually ease its Non-Tariff Barriers (NTBs)
on Pakistani items.
b)Removal of 614 items from the sensitive list in which
Pakistan has excellence.
Analysis of SAFTA:
South Asia Free Trade Area was established in January 2006.
SAFTA provide a huge scope for trade among the member
countries.
Trade volume between India and Pakistan can increase to $42
billion from current volume of only $2.5 billion, if implemented in
true essence.
Pakistan maintains a positive list of about 1400 items that India
may export to Pakistan.
The India maintains high tariffs on goods such as textiles, leather,
and the mineral onyx, which are of particular interest to Pakistan.
Analysis of SAFTA:
Initiative by India to grant MFN status to Pakistan, and Pakistan
reciprocating it with significantly lower tariff rates on goods is in
particular interest to Pakistan.
Reforms and initiatives for Foreign Direct Investment flows.
Volume of formal trade can only be increase by de-regularizing the
informal trade. i.e. minimizing trade cost such as transportation,
freight charges and tariff barriers and by easing strict visa regime.
Strategic face of CPEC and Pakistan- India Relations:
Strategic outreach to Indian Ocean via Gwadar (624 nautical km
to the east of Strait of Hormuz) will help China to counter Indian
and American naval activities.
China’s submarine operations in the Indian Ocean and the
Chinese-Pakistani naval cooperation will have the potential to
change the regional naval power balance.
India has established a cell in RAW with special allocation of
huge sum of money approx. $300 million to scuttle this mega
project.
RAW-NDS nexus and active training camps on Pakistan-
Afghanistan border, near Spin Boldak, across the border from the
Pakistani town of Chaman.
Strategic face of CPEC and Pakistan- India Relations:
Apprehension and confessional video statement of Indian spy
Kulbhushan admitting to foment terrorism in Balochistan and
Karachi vindicated India’s nefarious designs and involvement to
sabotage CPEC project.
Logistics support agreement (it will allow the US. and Indian
militaries to use each other's land, air and naval bases for
resupplies, repair and rest) in its final phase to counter China’s
influence in the South China Sea and into the Indian Ocean.
India is also making new inroads into the Gulf region among the
nations disaffected with Pakistan because of its rather balanced
position on Iran-Gulf relations.
Contemporary trends b/w India and Pakistan
Pakistan is pursuing a policy of distancing from all anti-
Indian non state actors which is itself a promising trend.
Pathankot incident __a test case, setting a good precedent of
restrain by India and Pakistan’s positive response in that
direction.
The precedent of intelligence sharing by Pakistan National
Security Adviser (NSA) Nasir Janjua with his India
counterpart about a possible terror attack in Gujarat.
Capturing of a Indian spy brought both countries back to
square one.
Contemporary Trends b/w India and Pakistan:
Dozen of "laser walls" have been made operational along the
India-Pakistan international border in Punjab.
Pakistan still adopting a constructive and principle position
conveying India that it wants a structured, sustained and
result-oriented comprehensive dialogue to address all the
issue.
Indian lobby factor in the drop of F-16 subsidy:
Pro-India US legislators objection to a sale of F-16
aircraft to Pakistan. These voices are American;
but the agenda is India’s.
Way Forward:
The policy of Pakistan must be based on positive engagement
without compromise on core principles.
Pakistan must strive for dialogue Process with India without
preconditions.
Pakistan need to Normalize the relation with India coupled with
respect to dignity.
Dire need of Strategic stability and balance vis-à-vis nuclear
weapons in South Asia.
India need to resume the dialogue process with comprehensive
approach.
Need for substantial efforts by both sides to overcome bilateral odds.
Way Forward:
Effective mechanism of Military to military co-
operation.
Need to re-examine Simla accord to solve the
Kashmir issue.
Need to regularize and accountability of Media of
over propagating negativism.
Back channel diplomacy by both sides.
Both States need to promote Track 11and 111
initiatives and regularization of intercourse at every
official level.
Way Forward:
Need to pursue mutually beneficial economic goals by
putting aside fraught politics.
If India and China can have trade amounting 75
billion dollars despite irredentist issues, then why can’t
Pakistan and India.
India and Pakistan need to promote close and
enduring partnership in trade.
Need to public support for free bilateral trade.
“When goods don’t travel across
borders, soldiers will.” -Frederich de Bastiat
THANK
YOU

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Pak-India Relations..An Appraisal

  • 1. An Appraisal of Pakistan-India Relations
  • 2.  More than six decades after independence, Pakistan-India relations are less extensive than were those between the United States and the Soviet Union at the height of the Cold War.  Since Independence, Pakistan-India relations have been under the shadows of suspicions, misunderstandings, tensions and wars. Both states never succeeded to win the mutual interests of each other because of their unresolved disputes, myopic approach and lack of co-operation.
  • 3.  Pakistan-India Relations can be best described as one step ahead and two steps backward.  India has been seen as continually seeking regional hegemony thus always creating a threat of insecurity for Pakistan.  India strives to impose systemic Unipolarity whereas Pakistan seeks to maintain Bipolarity. Thus ensuing divergence of structural interests creates conflict prone regional dynamics.
  • 4.  For India regional Unipolarity is essential to ensure the emerging Asiatic systemic position.  For Pakistan regional Bipolarity is essential to ensure state survival.  India’s hegemonic interests, uncontested regional power, greater global influence and ill will towards Pakistan by growing aggregate power base increase Pakistan’s perception of existential threat.  Kashmir and water remain the dangerous flash points between India and Pakistan.
  • 5. Kashmir Issue: Historical Background and Constitutional Framework Governing IHK There were about 562 Princely States, which existed under the overall paramountcy of the British Crown. The Cabinet Mission, in its statement of May 16, 1946, clarified that ‘Paramountcy could neither be retained by the British Crown nor transferred to the new Government’.
  • 6. Kashmir Issue: In Section 7 of the Indian Independence Act, 1947, it was stated that ‘ the suzerainty of His Majesty over the Indian States lapses.’ Thus, legally the Princely States became independent. The last British Viceroy Lord Mountbatten, during his address to the Chamber of Princes on July 25, 1947, asserted that ‘the rulers were technically at liberty to link with either of the dominion (India or Pakistan).
  • 7. Kashmir Issue:  As regards the criteria to be followed, Viceroy held that ‘normally geographical situation and communal interests and so forth will be the factors to be considered.’ Princely States were, therefore, free to join either of the two Dominions or to remain independent.  By August 15, 1947, the majority of the Princely States, owing to their geographical contiguity and Hindu population, joined India while only ten joined Pakistan.
  • 8. Kashmir Issue: Jammu and Kashmir State had a Muslim majority population, under a Hindu ruler who was in favour of remaining independent. The Muslim majority population of Jammu and Kashmir was in favour of joining Pakistan. In end of July1947, the Maharaja ordered the Muslims to surrender their arms to the police, and communal violence erupted.  In the Jammu province, hundreds of Muslims were massacred by the Hindus and Sikhs, who attacked Muslim villages.
  • 9. Kashmir Issue: In August 1947, on the eve of Partition, Poonch revolted against the Maharaja’s rule and in September 1947, the Muslim population liberated the area from the State Police. In October 1947, there was a revolt by the Muslim population against the Maharaja. He fled from the capital Srinagar to Jammu on October 26, 1947, and appealed to India for help. India claims that the Maharaja signed the ‘Instrument of Accession’ on October 26.
  • 10. Kashmir Issue: In January 1950, India accorded a ‘special status’to the State through Article 370 of the Indian Constitution. Under the said Article three subjects, namely defence, external affairs and communications only were to be dealt by the Indian Parliament. In February 1954 the Kashmir Constituent Assembly, while adhering in principle to the special position of the State, confirmed the legality of its accession to India.
  • 11. Kashmir Issue: In 1954, the president of India promulgated a Constitutional Order, empowering the Indian government ‘to legislate on all matters on the Union List, not just defence, foreign affairs and communications. In November 1956, the Constituent Assembly of IHK finalized the Constitution of the State. The UN Security Council in its Resolution 122 of Jan 24, 1957, affirmed that the ‘final disposition of the State of Jammu and Kashmir will be made in accordance with the will of the people expressed through the democratic means under the auspices of the UN.
  • 12. Kashmir Issue: Contemporary Indian Government’s Agenda Suppress the cause of Kashmir’s freedom by means of 'undemocratic and coercive' attitude and policy Demographic change by bringing and settling Kashmiri Pandits in exclusive colonies against the spirit of Article 370 of the Indian Constitution under which Indian Held Kashmir enjoys a special status and integration of the state into the Indian Union. Legal Protection (unbridled power) to the Indian troops in the guise of the Armed Forces Special Powers Act (AFSPA)
  • 13. Kashmir Issue: Contemporary Indian Government’s Agenda On 20 Friday 2015 , the high court in Indian Held Kashmir ruled that that the special status guaranteed to India-held Kashmir under Article 370 was permanent. The judges said the “limited sovereignty” it enjoyed was “beyond amendment, repeal or abrogation”. This decision constitutes a rebuff to the hard-line BJP government’s attempt to alter the facts.
  • 14. Way Forward: Proactive diplomacy on Kashmir on all international fora should be pursued. Pakistan should not encourage calls for active support of armed, banned, militant groups in Kashmir. Allaying international concerns of not doing enough to tackle Alpha Elements working for the Kashmiri Cause, by monitoring and taking action against violent armed groups
  • 15. Water Issue: Historical Background of Indus Water Treaty On 1st April 1948, India stopped the delivery of water from the Ferozepur headworks to Dipalpur Canal and to main branches of the Upper Bari Doab Canal and denying water to some 5.5% of the sown area and almost 8% of the cultivated area. Agriculture of Pakistan of Pakistan almost dependent on water of Indus Basins River. On 4th May 1948, India agreed to the Inter-Dominion Agreement with Pakistan.
  • 16. Water Issue: The agreement allowed for the continuation of water supplies for irrigation purposes until the Pakistani side managed to develop alternative water resources. World Bank sponsored several rounds of talks in Washington from 1952 to 1960. In 1960 Indus Water Treaty was signed i.e. the division of water between India and Pakistan brokered by the World Bank.
  • 17. Water Issue: The Indus System of Rivers comprises of three Western Rivers the Indus, the Jhelum and Chenab and three Eastern Rivers - the Sutlej, the Beas and the Ravi The treaty gives India exclusive use of all of the waters of the Eastern Rivers and their tributaries before the point where the rivers enter Pakistan. The treaty gives Pakistan exclusive use of the Western Rivers- the Indus, the Jhelum and Chenab.
  • 18. Water Issue: Indus Water Treaty is the best treaty which the two rivals could get at that time . Under the Indus Water Treaty, India is not permitted to build dams for the purpose of water storage on the Indus, Chenab and Jhelum rivers, but it is allowed to make limited use of their water, including developing run of the river hydroelectric power projects.
  • 19. Water Issue: Violations of Indus Water Treaty by India Construction of illegal reservoirs like Wullar Barrage, Baglihar Dam, Kishanganga Hydro Electric Power Project vitiate the clause of treaty. In 1970s, India started the construction of Sallal hydro project on Chenab River. Pakistan objected the construction of this project, after a series of meetings, the issue got resolved through agreement between the two governments in April, 1978.
  • 20. Water Issue: In 1984, India announced plans to build the barrage, The Wullar Barrage, which Indian refers to as Tulbul Navigation project on the Jhelum River at the mouth of Wullar Lake was the second Indian project that became controversial and still remains unresolved. Baglihar, located on Chenab river was the third Indian project that became controversial. The International Court of Arbitration gave a verdict in favour of India due to weak Pakistan’s position.
  • 21. Water Issue: After Baglihar, India and Pakistan have got locked in a dispute over the configuration of Kishanganga hydroelectric project . On February 18th 2013, the International Court of Arbitration gave a partial award in response to Pakistan’s appeal over India’s Kishenganga project, allowing India to divert waters from the Neelum- Jhelum river but restraining drawdown flushing techniques.
  • 22. Water Issue: Omissions and Challenges in the Treaty The treaty permits India to use the waters of the western rivers for irrigation and hydropower projects but it does not call for an examination of the cumulative effects of a cascade of such projects. The issue of the quality of water being affected by pollution due to toxic industrial waste was not considered in the treaty. Lack of operational capacity did not let Pakistan take full advantage of the Indus Water Treaty which served India’s interests better.
  • 23. Water Issue: The Treaty is silent about. a)How much water can be diverted through those projects. b)And in which season. The Indus Commission hasn’t played an effective role as envisaged in the treaty. All disputes have been settled by the courts of arbitration. Issues of climate changes and groundwater management were not mentioned when the treaty was being formulated.
  • 24. Water Issue: These include the rapid melting and recession of the Hindukush-Himalayan glaciers, disruption in monsoon pattern that replenished river flows and aquifers; increase in the number, duration, and severity of floods or droughts as well as higher temperature. Pakistan, at present, has water storage capacity of just 9 percent (30 days) against international average capacity of 40 percent.
  • 25. Water Issue: Need to re-envisage the Treaty. Need to initiate a serious dialogue on strengthening the dispute resolution mechanism of the Indus Water Treaty. Need to develop plans of action for co-operation on water- related challenges. The long-term water security of India and Pakistan, which is closely linked to their food and energy security, can only be achieved if they can muster the necessary political will to establish mutually beneficial co-operation on water resources.
  • 26. Water Issue: Need to establish a joint Sophisticated Forecasting System, That will allow for real time data sharing regarding the flow of water in the rivers and tributaries of the Indus Water System. This data must be shared through the website that include three dimensional models of dams. There should be a permanent liaison between Ministry of Water & Power and Ministry of Foreign Affairs in order to promote informed decision making on water related issues with India. Pakistan should actively highlight the violation of Indus Water Treaty by India on international forums by drawing attention towards the humanitarian aspects.
  • 27. Trade between India and Pakistan: Potentials and Pitfalls Economic co-operation and trade is the best way to darn relations between two countries. Economic integration and trade was the basic dynamic which brought peace and prosperity in Europe after 2nd World War. Free markets and trade, common value of tolerance and understanding can re-invent the relations. Economic integration could yield a Peace Dividend between both states.
  • 28. Trade between India and Pakistan: Potentials and Pitfalls “Customs unions and other systems of closer commercial relations could serve as the means to the improvement of political relations and the maintenance of peace.” Economist Wilfred Pareto By economic and trade cooperation with India, Pakistan can gain a huge market of more than one billion people. The lower in transportation and transaction cost of trade will benefit the business industry of both countries.
  • 29. Trade between India and Pakistan: Potentials and Pitfalls Pakistan, by allowing Transit facilities over land to India for its trade with Afghanistan, could gain enormous economic benefit. Pakistan’s Non Discriminatory Market Access (NDMA) to India will lead to a mutually beneficial trade relationship if: a)India agrees to gradually ease its Non-Tariff Barriers (NTBs) on Pakistani items. b)Removal of 614 items from the sensitive list in which Pakistan has excellence.
  • 30. Analysis of SAFTA: South Asia Free Trade Area was established in January 2006. SAFTA provide a huge scope for trade among the member countries. Trade volume between India and Pakistan can increase to $42 billion from current volume of only $2.5 billion, if implemented in true essence. Pakistan maintains a positive list of about 1400 items that India may export to Pakistan. The India maintains high tariffs on goods such as textiles, leather, and the mineral onyx, which are of particular interest to Pakistan.
  • 31. Analysis of SAFTA: Initiative by India to grant MFN status to Pakistan, and Pakistan reciprocating it with significantly lower tariff rates on goods is in particular interest to Pakistan. Reforms and initiatives for Foreign Direct Investment flows. Volume of formal trade can only be increase by de-regularizing the informal trade. i.e. minimizing trade cost such as transportation, freight charges and tariff barriers and by easing strict visa regime.
  • 32. Strategic face of CPEC and Pakistan- India Relations: Strategic outreach to Indian Ocean via Gwadar (624 nautical km to the east of Strait of Hormuz) will help China to counter Indian and American naval activities. China’s submarine operations in the Indian Ocean and the Chinese-Pakistani naval cooperation will have the potential to change the regional naval power balance. India has established a cell in RAW with special allocation of huge sum of money approx. $300 million to scuttle this mega project. RAW-NDS nexus and active training camps on Pakistan- Afghanistan border, near Spin Boldak, across the border from the Pakistani town of Chaman.
  • 33. Strategic face of CPEC and Pakistan- India Relations: Apprehension and confessional video statement of Indian spy Kulbhushan admitting to foment terrorism in Balochistan and Karachi vindicated India’s nefarious designs and involvement to sabotage CPEC project. Logistics support agreement (it will allow the US. and Indian militaries to use each other's land, air and naval bases for resupplies, repair and rest) in its final phase to counter China’s influence in the South China Sea and into the Indian Ocean. India is also making new inroads into the Gulf region among the nations disaffected with Pakistan because of its rather balanced position on Iran-Gulf relations.
  • 34. Contemporary trends b/w India and Pakistan Pakistan is pursuing a policy of distancing from all anti- Indian non state actors which is itself a promising trend. Pathankot incident __a test case, setting a good precedent of restrain by India and Pakistan’s positive response in that direction. The precedent of intelligence sharing by Pakistan National Security Adviser (NSA) Nasir Janjua with his India counterpart about a possible terror attack in Gujarat. Capturing of a Indian spy brought both countries back to square one.
  • 35. Contemporary Trends b/w India and Pakistan: Dozen of "laser walls" have been made operational along the India-Pakistan international border in Punjab. Pakistan still adopting a constructive and principle position conveying India that it wants a structured, sustained and result-oriented comprehensive dialogue to address all the issue. Indian lobby factor in the drop of F-16 subsidy: Pro-India US legislators objection to a sale of F-16 aircraft to Pakistan. These voices are American; but the agenda is India’s.
  • 36. Way Forward: The policy of Pakistan must be based on positive engagement without compromise on core principles. Pakistan must strive for dialogue Process with India without preconditions. Pakistan need to Normalize the relation with India coupled with respect to dignity. Dire need of Strategic stability and balance vis-à-vis nuclear weapons in South Asia. India need to resume the dialogue process with comprehensive approach. Need for substantial efforts by both sides to overcome bilateral odds.
  • 37. Way Forward: Effective mechanism of Military to military co- operation. Need to re-examine Simla accord to solve the Kashmir issue. Need to regularize and accountability of Media of over propagating negativism. Back channel diplomacy by both sides. Both States need to promote Track 11and 111 initiatives and regularization of intercourse at every official level.
  • 38. Way Forward: Need to pursue mutually beneficial economic goals by putting aside fraught politics. If India and China can have trade amounting 75 billion dollars despite irredentist issues, then why can’t Pakistan and India. India and Pakistan need to promote close and enduring partnership in trade. Need to public support for free bilateral trade. “When goods don’t travel across borders, soldiers will.” -Frederich de Bastiat