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Nisha Taneja Isha Dayal Editors India–Pakistan Trade Normalisation The Unfinished Economic Agenda India–Pakistan Trade Normalisation Nisha Taneja • Isha Dayal Editors India–Pakistan Trade Normalisation The Unfinished Economic Agenda 123 Editors Nisha Taneja Isha Dayal Indian Council for Research on International Indian Council for Research on International Economic Relations (ICRIER) Economic Relations (ICRIER) New Delhi New Delhi India India ISBN 978-981-10-2214-2 ISBN 978-981-10-2215-9 (eBook) DOI 10.1007/978-981-10-2215-9 Library of Congress Control Number: 2016950376 © Indian Council for Research on International Economic Relations 2017 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. Printed on acid-free paper This Springer imprint is published by Springer Nature The registered company is Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #22-06/08 Gateway East, Singapore 189721, Singapore Contents 1 Emerging Issues in India–Pakistan Trade: An Introduction ...... 1 Nisha Taneja, Rohan Ray, Isha Dayal and Samridhi Bimal 2 Agricultural Trade Between India and Pakistan: Status and Potential ............................................ 15 Ramesh Chand and Raka Saxena 3 Exploring the Trade in Textiles and Clothing Between India and Pakistan ............................................ 61 Nisha Taneja, Saon Ray and Devyani Pande 4 Assessing the Future of Trade in the Automobile Sector Between India and Pakistan: Implications of Abolishing the Negative List ......................................... 93 Biswajit Nag 5 India–Pakistan Trade: Perspectives from the Automobile Sector in Pakistan ........................................ 129 Vaqar Ahmed and Samavia Batool 6 India–Pakistan Trade: An Analysis of the Pharmaceutical Sector.... 163 Manoj Pant and Devyani Pande 7 India–Pakistan Trade: A Case Study of the Pharmaceutical Sector .................................................. 219 Vaqar Ahmed and Samavia Batool 8 India’s Informal Trade with Pakistan ........................ 245 Nisha Taneja and Samridhi Bimal 9 India–Pakistan: Second Trade Perception Survey .............. 271 Nisha Taneja, Mohammad Usman Khan, Isha Dayal and Samridhi Bimal v vi Contents 10 Facilitating India–Pakistan Trade Through the Land Route ...... 313 Nisha Taneja, Isha Dayal and Samridhi Bimal 11 Munabao–Khokhrapar Land Route and India–Pakistan Relations ............................................... 347 Tridivesh Singh Maini 12 Media Underreporting as a Barrier to India–Pakistan Trade Normalization: Quantitative Analysis of Newsprint Dailies ....... 373 Rahul Mediratta Editors and Contributors About the Editors Nisha Taneja is Professor at the Indian Council for Research on International Economic Relations (ICRIER), New Delhi, India. She has a Ph.D. from the Jawaharlal Nehru University, New Delhi, and has a wide range of experience in policy-oriented research in India. Her key areas of interest include trade and transport facilitation, non-tariff barriers, regional integration, informal trade, insti- tutional economics and the textile industry. She has worked on various aspects of India–Pakistan trade, India–Nepal trade, India–Sri Lanka trade, India–China trade, India–Japan trade, India–Korea trade, India–Bangladesh trade and India–Myanmar trade on issues related to tariffs, sensitive lists, services, investment, non-tariff measures, and trade and transport facilitation. Dr. Taneja’s research work has been a key contributor to the trade negotiations in the South Asian region. She has served on committees set up by the Government of India on informal trade, rules of origin and non-tariff barriers. She has been a consultant to the World Bank and the Asian Development Bank. Dr. Taneja has also conducted research for several government ministries, bilateral and multilateral agencies. Dr. Taneja has published three books, more than 50 articles in books and journals and 35 reports/working papers. She is the co-editor of the book India-Pakistan Trade: Strengthening Economic Relations, published by Springer in August 2014. Her work has been disseminated widely in India and several other countries including Bangladesh, Nepal, Sri Lanka, Pakistan, Philippines, Thailand, Korea, Japan, USA, UAE and Germany. Isha Dayal is a Ph.D. candidate at the Lee Kuan Yew School of Public Policy, National University of Singapore (NUS). Prior to this she was Research Associate at Indian Council for Research on International Economic Relations (ICRIER), New Delhi, associated with projects on India–Pakistan trade normalization sup- ported by DFID and Japan Project supported by Sasakawa Peace Foundation. Her research interests include trade policy and international economy, with focus on vii viii Editors and Contributors trade facilitation, transit and connectivity, regional integration, and international aid flows, and has worked on several research articles and papers on these themes. Previously, Isha has been a consultant with the United Nations Development Programme (UNDP), India, and Infrastructure Development Finance Company (IDFC Ltd.), New Delhi. She has a Bachelor’s degree in Economics from Miranda House, University of Delhi; and an M.Sc. Degree in Economic Development and Policy Analysis from the University of Nottingham, United Kingdom. Contributors Vaqar Ahmed SDPI, Islamabad, Pakistan Samavia Batool SDPI, Islamabad, Pakistan Samridhi Bimal ICRIER, New Delhi, India Ramesh Chand National Institute of Agricultural Economics and Policy Research, New Delhi, India Isha Dayal ICRIER, New Delhi, India Tridivesh Singh Maini O.P. Jindal University, Sonipat, India Rahul Mediratta Northwestern University, Evanston, USA Biswajit Nag Indian Institute of Foreign Trade, New Delhi, India Devyani Pande ICRIER, New Delhi, India Manoj Pant Centre for International Trade and Development, School of International Studies Jawaharlal Nehru University, New Delhi, India Rohan Ray ICRIER, New Delhi, India Saon Ray ICRIER, New Delhi, India Raka Saxena National Institute of Agricultural Economics and Policy Research, New Delhi, India Nisha Taneja ICRIER, New Delhi, India Mohammad Usman Khan LUMS, Lahore, Pakistan Abbreviations ACMA Auto Component Manufacturers Association (India) AIDP Auto Industry Development Programme APIs Active Pharmaceutical Ingredients APMA Association of Pakistan’s Motorcycle Assemblers APTTA Afghanistan–Pakistan Transit-Trade Agreement APTU Technical standards and adoption of uniform technical prescriptions for railway material ATC Agreement on Textiles and clothing ATMF Technical admission of railway vehicles/railway material used in international traffic ATT Afghan Transit Trade BIS Bureau of Indian Standards BoI Board of Investment BRCA Bilateral Revealed Comparative Advantage BS Business Standard CAGR Compound Average Growth Rate CBU Completely Built Up CBUs Completely Built Units CCP Competition Commission of Pakistan CDP Composite Dialogue Process CIF Cost, Insurance and Freight CIM Contracts of carriage for the international carriage goods CITI Confederation of Indian Textile Industry CIV Contracts of carriage for the international carriage of passengers CKD Completely Knocked Down CONCOR Container Corporation of India Limited COTIF Convention Concerning the International Transport of Goods by Rail CPD Convergent Parallel Design ix x Abbreviations CPFTA China–Pakistan free trade area CUI Contract on the use of railway infrastructure CUV Contracts of Use of Vehicles CV Coefficient of Variation CVD Countervailing Duties CWC Central Warehousing Corporation DGCIS Directorate General of Commercial Intelligence and Statistics DOP Department of Pharmaceuticals DRAP Drug Regulatory Authority of Pakistan ECO Economic Cooperation Organization EDB Engineering Development Board EDI Electronic Data Interchange ET Economic Times FCL Full Container Load FDGs Focus Group Discussions FDI Foreign Direct Investment FGD Focus Group Discussion FOB Free on Board FPCCI Federation of Pakistan Chambers of Commerce and Industry FTA Free Trade Agreement GATT General Agreement on Trade and Tariffs GDP Gross Domestic Product GNP Gross National Product GoP Government of Pakistan HC & NOx Hydrocarbons and nitrogen oxides HC, CO & NOx Hydrocarbons, carbon monoxide and nitrogen oxides HCV Heavy Commercial Vehicles HIIT Horizontal Intra-Industry Trade HS Classification Harmonized System of Classification HS Harmon System IBM Institute of Business Management ICD Inland container depot ICP Integrated Check Post ICT Information and