Around 200-250 trucks without goods are parked near the Attari border after MFN status withdrawn. After the Pulwama terror attack, India withdrew 'Most Favoured Nation' status from Pakistan affecting businesses across India-Pakistan's Attari border. The traders told news agency ANI that Indian importers and manufacturers have cancelled all the orders to neighbouring Pakistan and are demanding the return of advance payments. "After February 14, all the trading with Pakistan was stopped. Currently, 200-250 trucks without goods are parked near the border after the government imposed 200 per cent Regulatory Duty (RD) on non-essential Indian imports," said Sukhbir Singh, a trader from Amritsar. "This move of the government of introducing higher Regulatory Duty is making difficult for traders to pay their monthly installments of tires and trucks. The Centre must re-think its decision. This move has also affected the food outlets situated near the border areas," said Sharan Singh, a trader from Amritsar said. The 'Most Favoured Nation' status to Pakistan was given by India in 1996. The status is given to an international trade partner to ensure non-discriminatory trade between all partner countries of the World Trade Organisation. A country which provides 'Most Favoured Nation' status to another country has to provide concessions, privileges, and immunity in trade agreements. It is the first clause in the General Agreement on Tariffs and Trade (GATT). Another trader Rajdeep Upel said that trading activity with Pakistan should not only be closed from Punjab orders but also from Jammu and Kashmir. "All trade organisations support the government's decision. We are surprised to know that land trade routes in Kashmir are still open, making the ban ineffective," he said. Over 40 CRPF personnel were killed on February 14 after a suicide bomber blew up his car full of explosives near a CRPF convoy on the Jammu-Srinagar highway.<doc-sep>ISLAMABAD: Finance Minis­ter Asad Umar on Thursday said India would itself suffer for its decision to withdraw Most Favoured Nations (MFN) status to Pakistan and impose 200pc duty on its products. The ‘inappropriate and unwise’ decisions of the Indian government on trade with Pakistan “tantamount to harm its own on economy instead of causing any loss to Pakistan”, said the minister when asked for comments on Indian move after the Pulwama attack. He said the steps taken by India demonstrated its immaturity that would be more harmful for its own economy. Exports to New Delhi, he said, will suffer because of imposition of duties. In response to a question on meetings of the Financial Action Task Force (FATF) currently in progress in Paris, Umar hoped the global watchdog on terror financing and money laundering would give a satisfactory report on Pakistan. He said the FATF would share its assessment on Friday. Responding to another question, the minister said the differences with the International Monetary Fund were narrowing down and technical level discussions were an ongoing process. He said the two sides had technical level discussions last week and another round would follow next week during which the two sides exchange data and information. “The (Fund) mission would be invited for final talks when we get closer to an agreement through technical level discussions,” the minister said when asked about the schedule of upcoming visit of the IMF mission. He said the regular interaction with IMF technical teams allowed for better communication and greater exchange of data. This has helped us narrow the existing gaps. Earlier, speaking at third Pakistan Leadership Convention, organised by Association of Chartered Certified Accountants (ACCA) of Pakistan, the minister said the government was introducing governance reforms to improve functioning of the public sector so that the country could move on the path to national progress and prosperity. He recalled he had made his first presentation on ‘Leadership in 21st Century’ after joining corporate world decades ago and added that challenges faced by a company could replicate to any society or country as a whole. The biggest challenge for Pakistan, he said, was existing gap between potential and reality of the country. “Pakistan’s potential is staggering while it’s far from reality,” he said, adding that reality was not reflective of the country’s potential. The minister said it was a challenge for a visionary leadership to put right people for the right job while the country’s governance structure was highly flawed and preference was being given for additional degrees rather than the relevant degree from high ranking universities like Havard. He said it was sad to note that kinship on account of clans, connections and political affiliations were considered as criteria for high-profile jobs but the PTI government was working under the guidance of Dr Ishrat Hussain to revamp government structures. He said that quality of governance could not be improved without overhauling bureaucracy and placing right men for the right job and professionals given preference over connections. For this, professionals would have to be extended full facilities and incentives to serve the country and take it to new heights. He said Pakistan was full of capable human resource but it was important to employ their expertise for the progress of the country. He said the private sector provided better opportunities to professionals and resultantly they perform to best of their capabilities. “Today, Pakistan is fortunate to have a leadership that has a vision for its future. If that vision materialises, then I can guarantee that Pakistan will be among the world’s top five economies by the end of this century,” the minister hoped. Published in Dawn, February 22nd, 2019<doc-sep>ISLAMABAD: No doubt ties between Pakistan and Saudi Arabia have touched new high with investment of $20 billion, including $10 for refinery and petrochemical complex in Gwadar, as announced by Crown Price Mohammed bin Salman but if compared with India’s ties, the ground reality is otherwise. Some 10 months back, Saudi Arabia signed in New Delhi an agreement to install $44 billion refinery in western India. The crown prince is going to announce today in New Dehli in his two-day visit more investment of billions of dollars in areas of tourism, customs and investment. Saudi Arabia contributes significantly to India’s energy security needs by supplying about 20% of crude requirements to India. It is worth noting that Saudi Arabia is most likely to come up with investment in the National Investment and Infrastructure Fund (NIIF) of India. The Kingdom walks in the footsteps of Abu Dhabi’s sovereign wealth fund, which is the first institutional investor in NIIF’s Master Fund in 2017 with a commitment of $1 billion. In 2018, Dubai-based DP World Ltd and NIIF announced a plan to jointly invest over $3 billion in India. Pakistan’s bilateral trade with Saudi Arabia stood at $1.871 billion in 2017-18 with exports of just $170 million and imports of $1.7 billion, but the trade of India with Saudi Arabia reached at $27.48 billion in the financial year 2017-18. Saudi Arabia's exports to India stood at $22.06 billion whereas India's exports were $5.41 billion in the last financial year. In Saudi Arabia, just over 2 million Pakistanis are working whereas close to 2.7 million Indian lives there. Pakistan’s total remittances from abroad stands closed to $20 billion out of which approximately $6 billion come from Saudi Arabia whereas India attracts $80 billion per annum in the head of remittances of which $10.5 billion come from Saudi Arabia. Saudi Arabia is ranked at 15th position in country-wise FDI joint venture in India and it is second in Arab countries followed by the UAE. Saudis have $21.55 million worth in FDI joint venture from 2004-05 to 2007-08. Saudi Arabia is also among the major FDI investing countries in India. It has invested $5.9 million during August 1991 to December 1999 and ($9.6 million) during January 2000 to August 2008. Investment is observed in diverse fields such as paper manufacture, chemicals, computer software, granite processing, industrial products and machinery, cement, metallurgical industries. In Pakistan, there is no worth mentioning investment from Saudi Arabia in the past except some financing from Saudi Fund for Neelum-Jhelum Hydropower project and other projects. However, Pakistan has maintained a unique position to assist Saudi Arabia with its defense needs. According to BBC report 2013, Saudi Arabia has invested in Pakistan's nuclear weapons projects. Both Pakistan and Saudi Arabia publicly denied the report. The Kingdom has often tried to woo Pakistan by giving it gifts and loans, often these are gifts with symbolic religious value, for example in 2014 it gifted Pakistan 200 tonnes of dates. Saudi Arabia gave a grant of $1.5 billion to Pakistan in early 2014 to become balance of payment issue. And during the era of Imran Khan as Prime Minister of Pakistan, Saudi Arabia has extended $3 billion loan to remain in Pakistan foreign exchange reserves with $3 billion oil facility for three years to again support of balance of payment issue showing Pakistan will have the oil facility of $25 million every month. Saudi-Pak Industrial and Agriculture Investment Company Limited with paid up capital of Rs6.6 billion with 50:50 percent shares was established for corporate product services. The said company also owns a twenty storey high rise building in Islamabad known as Saudi Pak Tower. The building, constructed in the year 1991, is known as a landmark of Islamabad. The tower is fully occupied with tenants including several national and multinational companies, financial institutions, telecommunication companies, hospital service oriented concerns etc. Pakistan state company Nespak is contributing to economy of Saudi Arabia. NESPAK made its debut in the Kingdom by setting up a joint venture with the Ar-Riyadh Development Authority in 1978. The Company established its Regional Office in Riyadh in 1982. Initially, Nespak acquired in the energy sector in the KSA, but later the Company was awarded projects in the sectors related to the fields of environmental and public health engineering, highways, architecture and planning, water resources and dam engineering, oil and gas, industrial, airports and ports and harbours. Nespak has been providing services for 28 projects in the environmental and public health engineering sector, 27 projects in the energy sector, 22 projects in highways sector and 19 projects in the architecture and planning sector. Nespak is associated with two Saudi companies in terms of business acquisition and the provision of consultancy services in the Kingdom of Saudi Arabia. Nespak joined hands with the Saudi Consulting Services (SAUDCONSULT) in 1986 by working on the project titled “Sedimentation Control Project for Jazan Dam Reservoir” as lead firm. The two companies carried out 34 projects together. To date, Nespak has secured 115 projects worth $ 21 billion out of which 22 projects are in operation. The ongoing projects are being handled by the NESPAK Regional Office and 22 site offices scattered all over the Kingdom. Pakistan State Life is also working in Saudi Arabia. Apart from it, according to official at Board of Investment, there are other Pakistan companies which are operational; in Saudi Arabia that include FWO and NLC. Habib Rafique Group is also operational in Saudi Arabia in construction sector. Pakistan’s KNN is in joint venture with Saudi Arabian company Danube Hyper market and Mitchel Pakistan and Mehran companies is working in food sector in Saudi Arabia. The investment regime is very restrictive in Saudi Arabia as at the time of renewal of licence, a non-Saudi company has to deposit 60,000 Saudi riyals whereas Saudi company has to submit only Rs500 Saudi riyal. Apart from it Pakistani companies have to submit 2.5 percent as zakat. Pakistan companies have started business there under the title of Saudi companies and this is the main reason that number of Pakistani companies is not visible in Saudi Arabia in a big scale. However, as many 69 India companies are working in Saudi Arabia in various fields such as travelling, insurance, telecommunication, civil construction, automotive, information technology, metals, jewellery, meat and animal products, construction, contracting, duct work and cleaning, maintenance, sale of chemical, service, education, service, education, cosmetics, bathroom fittings, fixtures & accessories and active pharmaceutical ingredient. The Indians are either owners or are partners in 322 companies working in S Arabia. An Economic Times report said that Crown Prince Mohammed bin Salman will sign an MoU during his visit to India for constituting Saudi-Indian Supreme Coordination Council. Some of the names of the companies working in Saudi Arabia include New India Assurance, Saudi Indian Insurance, Telecommunications Consultants India, Wipro Ltd. Riyadh, Tata Motors Ltd, Tata Consultancy Services Ltd. (TCS) Tata Consultancy Services Ltd, Larson & Toubro Saudi Arabia L.L.C, Saudi Al-Terais Co. for Contracting, Ayim Punjlloyd Construction Contracting Co Ltd, Lulu Saudi Hypermarkets LLC, Virtusa Polaris, Star Printing Press, S J Iron & Metals, Godrej & Boyce Mfg. Co. ltd, Dar Arms International, Contracting Establishment, and Sona Jewellers.<doc-sep>
India has withdrawn "Most Favoured Nation" status to Pakistan after Thursday's terror attack which claimed the life of at least 40 CRPF troopers. (Photo: Reuters) Just a day after at least 40 Central Reserve Police Force (CRPF) personnel lost their lives in a dastardly suicide bombing attack in Pulwama, the Indian government has withdrawn "Most Favoured Nation" or MFN status accorded to Pakistan. Finance Minister Arun Jaitley said the Ministry of External Affairs will initiate all possible steps to ensure complete isolation from the international community of Pakistan, which is expected to have a hand in the attack carried out by terror outfit Jaish-e-Mohammed. "MEA will initiate all possible diplomatic steps which are to be taken to ensure the complete isolation from the international community of Pakistan of which incontrovertible is available of having a direct hand in this act," said Jaitley. What is MFN status? Most Favoured Nation status is given to an international trade partner to ensure non-discriminatory trade between all partner countries of the WTO. A country which provides MFN status to another country has to provide concessions, privileges, and immunity in trade agreements. It is the first clause in the General Agreement on Tariffs and Trade (GATT). ALSO READ | Pulwama terror attack: In last 5 years, J&K saw 93% rise in death of security personnel in terror attacks Under rules of the World Trade Organisation (WTO), a member country is not allowed to discriminate between trade partners and if a special status is granted to one trade partner, the country is required to extend it to all members of the WTO. In a nutshell, MFN is a non-discriminatory trade policy as it ensures equal trading among all WTO member nations rather than exclusive trading privileges. Since India and Pakistan are part of the WTO, both are required to grant MFN status to each other and other partner countries. Does MFN status offer preferential treatment? Although it sounds as if MFN offers preferential treatment, it only ensures non-discriminatory trade. It makes sure that any country receiving MFN status avoids any disadvantageous situation in comparison to the granter's other trade partners. An MFN status helps reduce trade barriers and results in a reduction in tariffs. An MFN status helps in the promotion of free trade between two or more countries. When did India grant MFN status to Pakistan? India granted MFN status to Pakistan in 1996, just a year after the formation of the WTO. On the other hand, Pakistan is yet to award MFN status to India. The reason behind Pakistan's move to not grant MFN status to India is decades of conflict, mistrust, and war. Yesterday's attack on the CRPF convoy, which left 40 troopers dead and several others injured, has forced India to revoke MFN status given to Pakistan. The move is expected to further Pakistan's trade advantages which it gets from India. Considering that there is hardly any strong trade ties between the two neighbouring countries, such a move will only be symbolic. The move could also lead to increased illegal trade between the two countries. While past requests have been made to revoke MFN status awarded to Pakistan, the Indian government finally decided on the move after yesterday's devious attack. What happens now? Sources in the commerce ministry will now write to WTO in order to revoke MFN status given to Pakistan by invoking Article 21 of WTO, also known as the Security Exceptions Article. The process of communicating to WTO (file moved) has begun, suggested sources. As of now, the value of trade between India and Pakistan stands at 2.61 billion dollars or Rs 1.86 lakh crore. Pulwama terror attack On Thursday at around 3:30 pm, an explosive-laden SUV rammed into one of the buses out of a 70-vehicle CRPF convoy at Awantipora town in Jammu and Kashmir's Pulwama district. The bus, carrying around 35-40 soldiers, was passing through Gundipoora section when it was attacked. Pakistan-based JeM has identified the suicide bomber responsible for the attack as Adil Ahmed Dar and released a video of him soon after the attack. He was reportedly part of the Pakistan-based terror group since 2018. Currently, the situation in the Valley remains tense as all police convoys have been halted and an NIA team will be sent to Kashmir soon. Prime Minister Narendra Modi said the forces will be given full freedom to avenge the attack, adding that "Pakistan has made a huge mistake".