NEW DELHI: The President of the Federation of Indian Export Organisations (FIEO), O. P. Garg, on Saturday hailed the resumption of talks between India and Pakistan which are particularly aimed at amending the 1975 shipping protocol.

The protocol, when amended, will permit both Indian and Pakistani vessels to carry each other's cargo to different countries as well as allow third-country vessels to pick up cargo from each other's ports. This would help both the countries in cutting shipment costs, Mr. Garg said.

At present, the 1975 protocol does not allow shipping companies of both the countries to pick up transhipment cargo for a third-country party. Under the protocol, Indian flag vessels can only pick up cargo from an Indian port to be dropped at a Pakistani port, and vice versa.

The federation feels that if the protocol is amended to lift the restriction, the flow of cargo between Indian and Pakistani ports will increase dramatically. At present, India's trade with Pakistan is taking place through three channels — the illegal trade through land borders, the circular or "informal" trade, which is carried out through third countries, and the formal trade through official means.

Given the fact that the two countries share a common border, they can gain a lot by mutual trading by way of low freight costs, the FIEO chief said. For instance, Pakistan imports iron ore from Brazil and Australia and tea from Kenya at higher prices. These items, Mr. Garg said, could be purchased at much cheaper rates from India. Similarly, pharmaceutical products in India were about 30 per cent cheaper than in Pakistan and could fetch a good market here. Other Indian items which have great potential for export to Pakistan are tea and coffee. In turn, India offers a vast market for imports from Pakistan. Pakistan can export, with considerable advantage, products such as cotton yarn and textile fabrics, leather products, surgical instruments, sports goods, electric fans, water coolers, sugar, fruits and vegetables. It is already exporting textile yarn and fabrics to India.

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