Prospects for India-Pakistan trade

The India-Pakistan trade is estimated to be of the order of $2 billion per year; experts think that if trade were conducted under WTO rules, it could easily expand to $40 billion per year.   However, Pakistan has been hesitating; part of the reason is fear of being overwhelmed by India.

In my opinion, the window for opening up trade while Pakistan still has some competitive advantages over India is rapidly passing.

In 2010, Pakistan ranked 85th in the World Bank's Ease of Doing Business Index; India ranked 133rd.
In 2015, Pakistan ranked 138th, India ranked 130th -- and the report cut-off date for data was even while GOI was in the process of simplifying regulations, for e.g., start up of a business.

The best time to open up for trade for two economies is, IMO, while the smaller/weaker one still has some competitive advantages. That window has passed, I think; in particular, the current Government of India is very keen on climbing up these competitive rankings, and so Pakistan will find it hard to keep up.

Najam Sethi on a Liberal Pakistan

Sounds too good to be true!

Now, thankfully, positive change is in the air. Nawaz Sharif was handpicked and nurtured by the military three decades ago to do its bidding. He duly became the nemesis of the PPP, in the bargain getting into bed with the religious parties, passing Islamic laws and promoting jihad against India. Now he is all for peace with India, wants to stop all jihad across borders, is waking up to action against sectarian parties and religious terrorists and is embarrassed and hampered by the Islamic laws passed on his watch. The military, no less, sees the primary and immediate national security threat as emanating from internal religious extremism and not externally from archenemy India. Unfortunately, however, Imran Khan’s PTI is still muddying the waters by continuing to resist the development of a new national narrative of state and society based on modern notions of liberal and secular democracy.