MFN status to India can raise Pakistan’s GDP by 2%: IPP research

IPP

Grant of MFN status to India could not only normalise trade relations between the two countries but could also boost Pakistan’s Gross Domestic Product (GDP) by 2 percent per annum according to research by the Institute of Public Policy. Former finance minister and Institute of Public Policy vice chairman Dr Hafiz Pasha said their organization’s research reflects that trade normalisation, commonly known as granting the Most Favored Nation (MFN) status to India, will also help trim down inflation on the back of availability of comparatively cheap Indian goods. Trade normalisation with India can also add to national funds by over Rs 470 billion per annum in addition to benefits of Rs70 billion to consumers in the shape of cheap imported goods, but this would require outsmarting smart Indian negotiators, he said. Pasha added that over a period of three years the country would achieve 700 million dollars in annual gains besides creating 200,000 new jobs. However, in comparison with Pakistan, India will only gain 0.5% in its GDP. Pasha said the Pakistan government should go ahead with granting MFN status to India, but should also get meaningful concessions while negotiating further reductions in the sensitive list maintained by India under the South Asia Free Trade Agreement. The government has not met its commitment of abolishing the negative list by the end of December 2012, citing concerns over the grant of MFN.



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