As India and Pakistan were set to commence trade ties, Pakistan’s federal cabinet on Thursday deferred a decision by the country’s Economic Coordination Committee (ECC), which sought the import of sugar, cotton, and cotton yarn from India through land and sea routes.
The cabinet, chaired by Prime Minister Imran Khan, observed that there could be no normalization of ties with India until the country reinstated Article 370 of its Constitution, which gave special status to Jammu and Kashmir.
The country had suspended all ties with India after New Delhi stripped J&K of its special status and bifurcated it into two Union Territories, unilaterally.
“Today Cabinet stated clearly NO trade with India,” read a tweet from Pakistan’s Minister for Human Rights Shireen Mazari. She said the PM had made it clear that “there can be no normalization of relations with India until they reverse their illegal actions” regarding the unilateral actions taken regarding J&K on Aug 5, 2019.
And today Cabinet stated clearly NO trade with India. PM made clear there can be no normalisation of relations with India until they reverse their illegal actions viz IIOJK of 5 Aug 2019. https://t.co/HDWt3kBM3c
— Shireen Mazari (@ShireenMazari1) April 1, 2021
The ECC had on Wednesday indicated that it was open to the approval of import permits to help reduce rampant inflation in the country, but it seems the suggestion was criticized and opposed by a section of leaders.
Terming the earlier decision to be “in the interest of the people”, Pakistan Finance Minister Hammad Azhar had said the government made the decision to help the economy upon being asked how the ties could be restored despite India’s position remaining unchanged on Kashmir.
— Prime Minister's Office, Pakistan (@PakPMO) April 1, 2021
The decision to resume the sugar trade was made public by the Pakistan government on Wednesday when its Finance Minister said that the price of sugar in India is “significantly cheaper than Pakistan; therefore, we have decided to open its trade and allow the commercial import of 500,000 tonnes of white sugar”.
The decision has now been deferred with the cabinet unanimously declaring that for the ties to proceed to that stage India has to roll back its August 5, 2019 decisions on Kashmir. There appears to be pressure from certain quarters and, possibly, fears of public backlash on the government if it chooses to restore trade with India.
Anger in Pakistan Over Trade Ties With India
There was growing anger in certain quarters in Pakistan against the decision to restore cotton and sugar imports with the people questioning the earlier stance of PM Imran Khan of taking a stringent position against India post 5 August 2019.
Many political observers said certain leaders in Pakistan felt that the country was giving too many concessions to India and too fast at that, without India itself having taken a single step.
And as such, although beneficial to Pakistan’s economy, this step could have negatively impacted the image of Imran Khan.
What really intrigued the people was the fact that PM Imran Khan himself handles the Commerce ministry which submitted the proposal for the import of cotton from India, while the Cabinet of Ministers that he heads rejected it.
Why is Indian Sugar and Cotton important to Pakistan?
Finance Minister Hamad Azhar during a press conference on Wednesday had acknowledged that the rising sugar prices were affecting the public, and the country was, therefore, looking at importing sugar from other countries.
And since the sugar prices were the lowest in neighboring India, the decision to import around 500,000 tonnes of sugar was taken.
The country’s demands are not being met with the 5.5 to 6 million tons annual production that happens within the country.
Azhar said that the demand for cotton in Pakistan has also increased due to overseas demand for the country’s textile products. The move to restore cotton import from India had been appreciated by Pakistan’s textile export bodies, who said, “the import of raw cotton, yarn and grey fabric from India will bridge the gap in demand and supply.
It will enable Pakistani exporters to continue growth momentum,” Dawn quoted Pakistan Textile Exporters Association Chairman Khurram Mukhtar as saying.
Pakistan’s industries witnessed a record export of textile export since the last year, with unprecedented growth in demand overseas. However, the export surge didn’t extend many benefits to the sector because of the requirement of imported cotton.
And according to the country’s Finance Minister, the small-scale industries in Pakistan cannot afford to import cotton from countries like Egypt and other countries, unlike bigger companies. This is where Indian cotton comes into play.
The country’s own cotton production this year has been the lowest in the last ten years because of a number of reasons, and therefore, unsustainable for the country’s growing textile industry.
Pakistan produced just around 5.7 million bales of cotton this year, and the textile industry in the country required more than 13 million bales to maintain optimum textile production.