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Friday, 12 October 2012

Pakistani, Indian banks may start cross-border work in March

Pakistani, Indian banks may start cross-border work in March

Banks in Pakistan and India have been advised to complete documentation required to open branches in each other’s countries by November 30, says Minister (Trade) at the High Commission of Pakistan in India Naeem Anwar.
“At the commerce secretary level-talks held recently, it was agreed that the banks should complete their documentation by November 30 in order to open branches in each other’s countries by March next year,” said Anwar at a meeting with members of the Karachi Chamber of Commerce and Industry (KCCI) on Tuesday.

He said that three Indian banks, including the Reserve Bank of India (commercial operations), Bank of India and Punjab National Bank, are getting their documents processed for opening branches in Pakistan while the National Bank of Pakistan and United Bank Limited have initiated the process to open branches in India.

The opening of bank branches is expected to facilitate trade between the two countries and is part of a series of steps designed to normalise economic relations, a process initiated in December 2010. Some 18 months after the resumption of talks between Pakistan and India, in September this year, the two finally signed three agreements pertaining to cooperation in customs matters, redressal of trade grievances and conformance to quality standards.

“All three agreements will be implemented soon,” Anwar said and added that such pacts would help address the issue of non-tariff barriers (NTBs).Commenting on visa issues, which are another major hurdle in the Pak-India trade, Anwar said that the two countries had agreed that visas would be issued for two categories.

“In the first category, a businessman declaring Rs0.5 million profit in a year would be eligible for a police-reporting visa valid for five Indian cities,” said Anwar. “In the other category, a businessman declaring profits of Rs3 million or above will be allowed to apply for a visa, which would be valid for ten Indian cities and would be exempt from police reporting.” However, Anwar said that the procedure to validate the income claims of businessmen intending to visit India has yet to be determined.

Regarding the issue of high customs tariff in India, Anwar said that at secretary level-talks, it had been agreed that India would reduce tariff lines to 100 under the South Asian Free Trade Agreement by April 2013. Accordingly, he said, Pakistan would also withdraw its negative list for imports from India.

“These developments indicate that Pakistan and India are likely to become big markets for each other; in this scenario, Pakistani manufacturers should enhance their production to tap into the Indian markets,” Anwar added.

Regarding air links from Pakistan and India, Anwar said that India would soon resume operations. “Indian private airlines are interested in starting operations beyond Islamabad,” he said, adding that Pakistan International Airlines has already started two flights to India.

To a suggestion about opening the Munnabao-Khokhrapar land route, Anwar said the issue had been discussed at the commerce secretary-level talks. He further asked the business community to identify goods for the land route.

Earlier, Haroon Agar, president of KCCI welcomed the talks between Pakistan and India for normalising economic relations. He praised the efforts of the high commission of Pakistan in India for facilitating the trade community of Pakistan.