SRINAGAR: Imran Khan-led cabinet has turned down the Economic Coordination Committee (ECC) recommendation of resuming trade with India. The committee had announced imports of sugar and cotton to manage its deficit and rising process, a day earlier.
The U-turn, within 24 hours, marked the unpredictability of tense bilateral relations that the nuclear-armed neighbours are trying to manage for peaceful coexistence.
The newsbreak came after Khan’s Human Rights minister tweeted: “Just for the record – All ECC decisions have to be approved by cabinet & only then they can be seen as ‘approved by govt’! So today in the cabinet there will be a discussion on ECC decisions including trade with India and then the government decision will be taken!” Se later put another tweet saying that the cabinet rule out normalisation of relations with India until Delhi reverses the August 2019, decision.
“There was no official word on the development from the Pakistan government,” Hindustan Times reported. “The reasons for the sudden change could not immediately be ascertained.”
Later, however, the Pakistan TV Geo News quoted Foreign Minister Shah Mohammad Qureshi offering details. “A perception was emerging that relations with India have moved towards normalisation and trade has been opened,” Qureshi was quoted saying by The Dawn newspaper. “There was an exchange of thoughts on this and there was a unanimous opinion on this and it was the prime minister’s [opinion] as well that as long as India does not review the unilateral steps it took on August 5, 2019, normalising relations with India will not be possible.”
Had Khan’s cabinet approved the ECC’s decision, it would have marked the beginning of the resumption of trade between the countries and a possible normalisation of diplomatic relations. The diplomatic relations were downgraded by Pakistan after the Lok Sabha read down Article 370 and bifurcated Jammu and Kashmir into two Union Territories.
The possibility of the resumption of trade was rekindled when Khan’s new finance minister, Hammad Azhar, announced the cotton and sugar import decision on Wednesday. The decision was seen as a forward movement after the rival armies decided to cease fire on the Line of Control and revive the 2003 Vajpayee ceasefire pact. Interestingly, Azhar had resumed office on Tuesday, a day before his import decision.
“The ECC had approved imports of up to 500,000 tonnes of sugar by the private sector and also allowed imports of cotton up to the end of June to meet the needs of small and medium enterprises,” Hindustan Times reported.
The import decision, according to Pakistan media was the beginning of many other initiatives in the coming months. “The other measures that the two countries are likely to take in coming months include the restoration of diplomatic ties to the level of ambassadors; encourage people to people contacts by restoring the religious tourism and possibility of bilateral cricket series between the two countries,” Pakistani newspaper, The Express Tribune reported. “A western diplomat while speaking on the condition of anonymity told The Express Tribune that Pakistan and India were pushed by powerful countries to seek re-engagement. He, however, was sceptical whether the process could survive given the complexities of the problems facing the two neighbours.”
India is the world’s biggest producer of cotton and the second biggest sugar manufacturer. Pakistan consumes sugar at almost 20 per cent expensive than India and its bad cotton crop last year has impacted its exports.
The downgrade of diplomatic ties has hit bilateral trade seriously. In 2020, India’s exports to Pakistan dipped by 76.3% to $283 million while imports plummeted by 96.2% to just $2.5 million. If relations are normalized, the bilateral trade has the potential of reaching up to the US $ 37 billion, according to a 2018 World Bank assessment. In May 2020, Pakistan had lifted the ban on the import of medicines and raw material of essential drugs from India amid the Covid-19 pandemic.