Pakistan is expanding its bilateral trade with India by allowing more imports from the neighbouring country, including diesel and fuel oil, a cabinet minister said.Pakistan’s decision to expand its list of imports from India is part of efforts to cut its widening trade deficit and reduce rising transport costs on imports from far-off countries.
"We are gradually liberalising our bilateral trade with India," de facto Commerce Minister Ahmed Mukhtar said while announcing new trade policy on state-run television late on Friday.
Trade has for years been limited between the nuclear-armed old rivals, which have fought three wars since their independence in 1947 and nearly went to war a fourth time in 2002.
The two countries launched a peace process in 2004 in an effort to normalise their relations, including their economic and commercial ties.
Mukhtar said Pakistan was adding diesel, fuel oil and many other items on the list of imports from India.
"It will be cheaper (to import from India) due to differences in transportation cost. This will also help us to address our global trade deficit," he said.
Pakistan’s trade deficit for the fiscal year 2007/08 (July-June) widened by 52.95 percent to $20.74 billion as against $13.56 billion in the same period last year, mainly due to rising global oil prices.
Oil accounted for 28 percent of Pakistan’s total imports of $35.95 billion during the first 11 months of 2007/08.
Other items that can now be imported from India includes CNG buses, academic, scientific and references books, machinery and equipment for mining, quarrying and grinding of minerals and certain raw materials.
"Cheaper raw material sourced from India would make our exports more competitive in international market," Mukhtar said.
Stainless steel and cotton yarn, which is importable from Indian by train, can now also be imported by trucks through their main border crossing of Wagah to further reduce the cost of business, Mukhtar said.
The two countries last year announced an ambitious goal to increase their trade to $10 billion by 2010 from $1.7 billion in 2006/07.
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