Open route for FAIR TRADE

The good sense has prevailed at last. The Indo-Pak trade pact will have a more cordial edge now, creating excitements among the business communities in both the countries.

 

Two successive events, India Show in February in Lahore this year, organised by FICCI and IBEF and supported by Pakistan’s Commerce Ministry and Lahore Chamber of Commerce and Industry (LCCI), followed by Lifestyle Pakistan show in April at Pragati Maidan, New Delhi, jointly organised by ITPO and TDAP, were actually the attempts to ease out the tension for establishing long term benefits through fair trade practice.

 

At India Show over 110 pavilions were set up to showcase products as diverse as jewellery, cosmetics, chemicals, textiles, auto components, handicrafts and engineering goods.  In India more than 100 exhibitors from Pakistan participated representing all the sectors of lifestyle including apparels, home textile, fabrics, lawn, sanitaryware, kitchenware, designer furniture, marble, etc.

 

According to FICCI, Indo-Pak bilateral trade stood at $2.75 billion (Rs 14,459 crores) last year, but has the potential to rise to $10 billion (Rs 5,25,800 crore), in the next four years. The trade primarily involves items like perishable goods, sports goods, processed food products, machinery, and staple cotton amongst others across the Line of Control. It also includes expensive and time consuming, circuitous trade route via Middle Eastern capitals like Dubai and Tehran. But these two events did make the perfect backdrop for sealing a friendly bi-lateral trade policy. The commerce minister, Anand Sharma, has announced that India has allowed FDI from Pakistan in principle and the following procedure is underway, which can extend to December this year. Also, opening up banking services in both the countries was considered in-principle to make the business transaction smooth.  In return Pakistan has conceded to grant India Most Favoured Nation (MFN status.

 

INDIAN BRANDS HAVE PRICE ADVANTAGES

The opening of trade routes will ensure that lower logistics cost and lowering of prices of the Indian products. Made in India brands in Pakistan are either available illegally or through Middle East trade route, causing unnecessary hike in price. With improved business environment, in March this year, Pakistan government allowed import of 137 items from its negative list of around 1200 items through Attari land route. The relaxation of imports from India has resulted in a historic business move by exporting 10 mt of newsprint to Pakistan by Amritsar-based newsprint company Khanna Paper Mills on 4th May 2012. The newspapers, which are as expensive as `28, will now come down with India-made newsprint available in the Pakistani markets.  The opening trade routes will now bring the countries closer to each other. Who doesn’t know the craze for Bollywood movies in Pakistan? But, at the same time, Pakistanis love to quench their thirst with Rasna, the popular soft drink brand in India. Dabur, the leading Ayurvedic brand in India, is available in Pakistan, sourced from the manufacturing facility of the company’s international business wing located at Dubai.  Tata Tea owned Tetley is a popular brand in Pakistan, which is available in Pakistan through JV partnership with Pakistan’s Lakson Group. India’s Apollo Tyre is one of the leading brands in the segment that has entered its market through Pakistani business partners. Some other brands like JK Tyre and Marico have entered the country through Middle East route. The popularity quotient tells that for the FMCG and confectionary brands of India there’s a huge opportunity in Pakistan.  On the other hand apparel manufacturers in India are welcoming the import of fabrics and denim from Pakistan. And textile import is seen as a competition intensifier. 

 

FOCUS ON FASHION RETAIL SPACE

At the Lifestyle Pakistan, a plethora of Pakistani retailers showed their keenness to set up outlets in the Indian territory. Leading fashion houses like Khadi and Chenone are all set to venture in the Indian retail market.  Chenone would prefer to have franchise partner, since the market is new to them and the brand follow franchise model. Eden Robe of 22 years old Eden Apparel intends to open outlets in India to offer ethnic Pakistani men’s wear, and its preferred business route is collaborating with a local business partner. Denim Limited of Artistic Denim Mills Limited has the plan to launch mid-range priced denim apparels in India with the help of a local partner. Such examples are plenty. Ideas by Gul Ahmed would like to add Indian designers to its portfolio, besides showcasing its products in India. Leading fashion labels of India, in the likes of Sabyasachi, Satya Paul, Tarun Tahiliani, have already won the hearts of Pakistani elitists for their acclaimed signature style. These labels are available through re-sellers. “I had a bitter experience visiting Karachi Fashion Week, though my visa was issued Pakistan’s textile ministry,” informs Jatin Kochar, the renowned fashion designer of India who is actually looking forward to amicable relationship with the country which can facilitate exchange of contemporary fashion ideas. Echoing the same thought the leading designer, Puja Nayyar, says that handling the complicated business process is actually preventing Indian designers to showcase their collections despite Pakistan is having a large section of clientele who appreciates Indian fashion creations.