ISLAMABAD: Pakistan has added 302 items to the list of commodities that can be imported from India, taking the total number to more than 1,000, a move that could significantly increase trade between the two countries.

The Commerce Ministry on Friday notified the additional items, which include homoeopathic medicines, machinery and machinery parts, surgical equipment and diesel locomotives.

`Positive' list

Pakistan conducts trade with India on the basis of a "positive" list, which thus far had 773 items. India has been making the case that Pakistan should drop the positive list altogether, and replace it with the less restrictive negative list, which only notifies items that cannot be traded in between the countries. But the Pakistan Commerce Ministry has maintained that improvement in trade ties is linked to progress on resolving the Kashmir issue.

Domestic pressure

According to officials, many of the items India wanted included were among the new additions to the positive list. The expansion of the list was also in response to domestic pressure. The textile industry lobbied hard for inclusion in the list of machinery that it discovered was cheaper to import from India than from Europe.

Of the 302 items in the new notification, only 20 are on the "sensitive list" of SAFTA, while the rest are eligible for tariff concessions under the agreement.

India to gain

Sources said the value of the new additions to the positive list was $1.3 billion, that is the amount Pakistan was spending on importing these items from other countries. India stands to gain by adding to its exports, while the lower cost of importing from a neighbour will help Pakistan reduce its import bill.

According to State Bank of Pakistan estimates, trade between India and Pakistan in 2005-2006 was over $800 million, more than double of what it was in 2003-2004. Pakistan's additions to the positive list could double that.

Trade potential

With informal trade between the two countries estimated to be as high as $ 2 billion, studies have suggested that the potential for trade between the two countries is as high as $ 6.5 billion.

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