The Economic Coordination Committee (ECC) of the Cabinet will take up two summaries of the commerce and textile ministry in the meeting on Wednesday(today).
According to the local media, the main purpose of the meeting is to decide on lifting the ban on the import of cotton, cotton yarn, and white sugar from India.
The ECC meeting chaired by the newly appointed Finance Minister Hammad Azhar is supposed to have a discussion and make a decision on 21 items of interest. Commerce and Textile divisions have submitted five crucial summaries for approval besides others.
Summaries submitted to the ECC sought permission to allow the import of white sugar and cotton from India via relevant channels.
Read More: Pakistan to import cotton yarn from India
The resumption of import of these goods is the first step in the resumption of Track II diplomacy between two countries via way of trade.
Following the Pulwama incident, on 15 February 2019, India revoked Pakistan’s Most Favored Nation (MFN) status. This MFN status is given to an international trade partner to ensure non-discriminatory trade between all partner countries of the WTO.
This withdrawal of status was followed by increased customs duties by India on imports from Pakistan. Thus, on 9 August 2019 Pakistan downgraded trade relations with India.
Since then, the trade relations between two neighbors have been strenuous.
In May 2020, Pakistan lifted the ban on the import of medicines and raw material from India to ensure there is no shortage of essential drugs amid the Covid-19 pandemic. This was the first step of reversing of complete suspension of trade with India.
Currently, cotton, yarn, and sugar imports are allowed from all countries except India.
This ban remained in place until recently, when there are reports of thawing of ice, as many agreements are signed. Pakistani and Indian premiers have exchanged letters on various occasions. Along with that, the trade ministers of both countries have made statements wishing for the resumption of trade.
Prime Minister Imran Khan, who himself holds the title of Minister-in-Charge of Commerce and Textile, has also shown support for the resumption of the trade by approving both summaries to be presented to the Economic Coordination Committee for its approval.
PM’s Advisor on Commerce and Investment Abdul Razak Dawood on Monday has granted approval to import cotton yarn through land routes (including India) to tackle the domestic shortfall and bring down the prices in the domestic market.
APTMA however, has been against this step by the government, as they believe it would harm the farmers, decreasing their remuneration as the price of cotton goes down, disincentivizing them from planting cotton next year.
Read More: Is India the answer to Pakistan’s current cotton yarn crisis?
Speaking to GVS earlier, Senior Executive APTMA, Saad Umar said that the association was not exactly against the import of cotton from India, but it believes that it should not be done at the cost of the domestic industry.