NEW DELHI — Indian and Pakistani officials are hopeful that easing of cross-border travel restrictions will improve their economic relationship.
Starting in mid-January, India and Pakistan will relax existing restrictions on visas, allowing people to obtain travel documents faster and travel more freely within the two countries. Some businessmen will also get multiple entry visas.
The new visa rules are part of a thaw in ties between the neighbors.
Pakistani High Commissioner to India Salman Bashir,told a business meeting in New Delhi Monday that easier cross-border travel will facilitate business ties. He is calling for a change of attitude on both sides at all levels.
“In terms of business and economic cooperation, what really matters is the sentiment," Bashir said. "We need to keep in our mind the importance of creating the right sentiment, creating the requisite enabling environment for industry and for trade to prosper together. We need to start changing the narrative. In Pakistan, we are very cognizant of that and we need to do more, both sides, to create that requisite enabling environment.”
The new visa rules are part of several measures adopted by both countries to improve cross-border trade, which is paltry, largely because of the legacy of a tense political relationship.
But since last year, both countries have resolved to improve economic issues and put more difficult disputes on the back-burner until a later time.
They have opened an expanded border trade terminal. Pakistan has opened most commerce to India by agreeing to grant it Most Favored Nation status.
An additional secretary at the Indian Foreign Ministry, Y.K. Sinha, says one of the biggest confidence building measures between India and Pakistan in recent times is their improving trade relationship.
“Most important is the sort of confidence that the business communities on each side, in each country have in each other, that is a very essential ingredient of the overall dialogue process," Sinha said. "It will serve to a large extent in trying to bridge the trust deficit that exists between the two countries and also it will be important for the overall growth of the region. I think the two biggest countries - India and Pakistan - once they are able to normalize their trade relations, it would benefit the region as a whole.”
Sanjay Kathuria, an economist at the World Bank, says India’s economic growth in recent years offers huge opportunities to smaller countries such as Bangladesh and Pakistan. But he says the trade potential is not being tapped because South Asia is one of the least integrated regions in the world compared to other regions such as the European Union or East Asia.
“South Asia trade at 2011 numbers is really four to five percent - the intra-regional trade compared to its total trade," explained Kathuria. " ou get the picture, that it is a very small share of total trade with the aspiration of EU being more than 60 percent but even closer to home, ASEAN being 20 to 25 percent.”
The World Bank estimates that trade within South Asia could grow to $20 billion, if restrictions are removed. Political leaders in both India and Pakistan say growing trade will also help stabilize the region.