Consequences of Free Trade with India

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Salams guys

as you may know, we are going to start free trade with india now. in pakistan we are going to completely open our markets to indian products which will be freely avlbl to pakistani consumers…and india will open her markets to pakistani products…

Whether we bury our neckd in the sand or not the liberal Musharraf has changed the Pakistani stance on the Kashmir issue so that we can gain on the economic front thru normalisation of ties and trade with india.

i already saw the ad of “dabar ki hajmola” on GEO last night, its an indian product…and earlier “khajoti surma” or “kajoti surma” .. something like that… from india.

so basically indian items (a small collection of which was already avlbl in pakistani markets but i think that might have been smuggled?) are now going to be avlbl freely in pakistan.

already i have heard from ppl that stuff in india (specially pharmaceutical products) is very cheap and the consumers in pakistan will greatly benefit overall coz they will save money, our pakistani manufacturers will face stiff competition and will have to up their quality. some medicines which are less than 10 rupees in india cost more than 50 rupees in pakistan.

i’m wondering what the effects of free trade with india will be in every sense…culturally, societally, economically, religiously, socially, geopolitically…in every way. what will be the short and long term effects in Pakistan?

and will this free trade with india last? what do you think? i think it might stop with a change of govt, when we get a more right wing govt in the future.

personally i am not too comfortable with free trade with india for some reason, that’s just my instinct… but maybe its just one of those things … b/c after all it seems that economically there is only “faida hi faida” (pure gain) for the pakistani consumers… but what abt socially and culturally? on that front too, if we feel threatened by mixing and import of indian products culturally then it is actually our own strength that we doubt so that’s not good. but then again, indian TV and indian media has not exactly played a good role on young pakistani minds.

we all know abt the indian dream of the united subcontinent…do they see free trade with pakistan as a step towards that direction and are we being willingly led to the altar?

hmmmm…i don’t know…i jus don’t feel too happy about free trade with india…something tells me its not the right step for our govt to take.

hmmmm

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Re: Consequences of Free Trade with India

It would be really good for both Pakistan & India....I am totally with Musharraf on this...

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Re: Consequences of Free Trade with India

hmmm

initially people are going to get access to cheap products but eventually when the market does stabilise then economically there won't be continued/new benefits to the consumers right?

but the cultural and geopolitical effects will be the ones that will be longlasting

also, on the one hand india is our enemy and on the other hand we're doing free trade with them? i don't get it. how can we be providing to their economy? should we be?

in amreeka and kanayda pakistanis prefer to buy more expensive pakistani products rather than indian ones....and here in pak we r doing free trade with india....

there r too many contradictions and i don't see all the pieces fitting in...

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Re: Consequences of Free Trade with India

Irem this psychie of ENEMY thingie has to end...You can't be an enemy for ever....Both India & Pakistan has accepted each other as seperate soveriegn countires,that now & forever have to live side by side...You cannot shun the influence of one country onto another...

There is not much difference between Swedish & Norwegian languages & culture...and both coutries at one time or another in the past have invaded each other....but they have learned to live with each other & thus are successful...And this should be the fate of India & Pakistan...We have to lay off our insecurities...

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Re: Consequences of Free Trade with India

Goliko, yes indeed we can stop being enemies, i dont like it either, i have had some good indian friends too..

but as a nation, they first need to ACCEPT us as a sovereign state, and shun their dream of united india and pak and colonisation of pak

only if there is mutual respect and acceptance can we become "friends"...i also believe in burying the hatchet and benefitting each other....but that can't come before there is mutual respect and acceptance of both sides...Pakistan has always been ready for that but i dont think india has...and till now is not...

oopar oopar se "friends" banNay ka kya faida...ya toh dushman hi rahein ya phir dosti karein to DIL se karein...dont u think?

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Re: Consequences of Free Trade with India

why the paranoia? it’s basic economic theory…pakistani firms and traders will have to step it up. without competition, little progress is made…there is no incentive. you must realize that free trade is not a zero sum game, your hesitation suggests that you believe it is.

lol, someone should inform indians about this dream!

to think that india is trying woo back pakistan through free trade is laughable. what they are doing is making money, simple as that.

what is your alternative suggestion?

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Re: Consequences of Free Trade with India

^ pakistan was granted and accepted a long time ago and millions died in the process. it's when pakistan started the kashmir bs that Indians said enough. kargil is a recent example.

Somehow pakistanis seem to want to feel superior only by attacking India and anything Indian. I am sure you heard the recent musharaf crap about teaching a lesson!

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Re: Consequences of Free Trade with India

Atlantis & nikhil, india never accepted pakistan...to this day when i talk to indians they hold this dream of united india...and pakistanis feel superior to indians? yes we do i think, thats a fault, we r prejudiced, but every race in the subcontinent is fraught with racial pride which they sometimes take to the extent of arrogance..but its wrong i agree with u...but indians also feel that pakistanis r "paindoo" and they (indians) r better and more advanced and developed...its also a fact!
alternative suggestion: to not do free trade with india, what else...
p.s. Atlantis, what kashmir "bs" .... ?

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Re: Consequences of Free Trade with India

i wasn’t really discussing any reunification idea…i just thought it was laughable that india would be sneakily moving towards this impossible and undesirable union through free trade. how does that even make sense?

i was under the impression that you were interested in providing the benefits of free trade some other way, i didn’t realize you were content with the status quo…perhaps less affluent pakistanis would disagree.

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Re: Consequences of Free Trade with India

nikhil i think the economic benefits of free trade with india will be felt short term but i dont think it will lead to overall long term inprovement of economic status of poor ppl in pakistan? once the market stabilises after the initial influx of indian products, things will pretty much fall into a humdrum routine again and everything will be back to normal...

or no?

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Re: Consequences of Free Trade with India

I don't know if you want to discuss this more from a political issue or economic issue.

I'll just focus on economics for now. Any time, any small(er) country opens trading with a much larger trading partner, there are many economic risks. "Dumping" is a known economic activity, where the larger country can initially afford to put their products at very low price (called "dumping") to wipe out local competition. And once the competition is gone, they can charge higher prices to recoup the losses. In many cases, the larger entity can make cheaper products just by economies of scale.

This puts the governments in a quandry. They can either put the interests of the customers first, since customers are getting cheap stuff. Or they can look out for their own manufacturing. Because, the downside is that this will wipe out (in an extreme case) local manufacturing, whereby your potential customer is actually going to be unemployed, creating more social and economical problems for the government and for the society. Therefore, historically, most governments took a very dim view of "dumping" and had laws to prevent it, in the form of quotas and what not. However, this goes against the principles of capitalism, so WTO is a way to end all these barriers. Its not just India, but Pakistan should get ready for all items from all places which makes them in the most cost-efficient manner.. may it be China, may it be Korea, or whatever.

This is not something limited to Pakistan either. United States is facing the same problem, where they have a huge trade imbalance with China. Although there are many other dynamics involved, suffice is to say, this is a fine line governments have to walk, and there are no easy answers either.

Hot or Not
Hot or Not
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Re: Consequences of Free Trade with India

Irem why are you so worried about penetration of Indian products in Pakistani market??Free market is usually a vice versa thing...India would be getting its Oil pipeline from Iran & Qatar...and many products from Central Asia ...all going through Pakistan...

17 April, South Africa v England at Kensington Oval, Barbados
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Re: Consequences of Free Trade with India

Bad example. Oil pipeline (if it ever materializes) or transit trade has limited royalty and customs duty upside, but nothing there will help generate manufacturing jobs in Pakistan that is vital for economic betterment (in terms of jobs opportunities, sales tax receipts etc) of Pakistan.

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Re: Consequences of Free Trade with India

Faisal bhai thanks for the explanation

this "dumping" thing doesn't sound good...do u know if our govt has taken steps to avoid that? we surely can't affford unemployment...

hmmm

i wanted to discuss the issue from all aspects...as i said in my first post....culturally, societally, economically, religiously, socially, geopolitically...

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Re: Consequences of Free Trade with India

^For Faisal,But in this example customs revenue is a thing that is not easy to generate & besides to build the pipelines..local labor would be required ...We have to open up to many countries of the region,not just India...One can't just create it's own world of closed markets & societies....Myanmar & Thailand are sitting side by side....but what Thailand has acheived ,Myanmar has lost by remaining closeted...

Hot or Not
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Re: Consequences of Free Trade with India

Goliko.. your example would have been better had you said that while Indians will be able to sell their surmas and their clothes and shoes and whatever they make better and cheaper, Pakistanis will be able to sell their sporting goods, surgical equipment, leather garments etc in India too. Thats a fair trade

Transit trade and oil pipelines have limited money-making potential and have practically no positive influence on society-at-large (money reinvested by government for infrastructure improvements is a long loop)

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Re: Consequences of Free Trade with India

Faisal...One thing for sure...you have to get out of this sense of that India can only export Surmas,clothes,paan & choona...We have to wake up as a nation...Bangalore is becoming the center of Information Technology of Asia,it has become a local market for computer software & Hardware & a hub for American out sourced jobs...
We have to accept that we are still to catch up with India in many fields....Open the markets & let the Trade & Industry flow,grow & develop...

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Re: Consequences of Free Trade with India

Aray bhai, I am taking the examples given in the first post.. and added "whatever they make better and cheaper". Why do you take an out of context example, rather then responding to the issue we are discussing.

Gere/Shetty
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Re: Consequences of Free Trade with India

^ Aray bhai these are just the insecurities....Chinese products haven't destroyed the USA yet....the same problem you are insecure about(the Dumping phenomenon)...

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Re: Consequences of Free Trade with India

These are not my personal theories. And “yet” is the operative word here (freudian slip, maybe). :k: :slight_smile: