India-Pakistan Trade Normalized: Does It Matter?

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Trucks carrying Pakistani commodities for Indian traders arrive at Pakistan-Indian Wagah border, near Lahore, Pakistan, November 3, 2011. Pakistan decided on November 2 to enhance trade ties with long-time rival India by granting it long-awaited Most Favoured Nation Status. (Rahat Dar / EPA)


When Pakistan granted India “most favored nation” (MFN) trading status yesterday (India did the same in 1995), Reuters called it “a major breakthrough that could bolster efforts to improve relations between the nuclear-armed rivals.” Some Indian officials agreed:

“It’s a very powerful step, and a welcome step in the right direction,” Indian Trade Secretary Rahul Khullar told Reuters in New Delhi. “It’s good for business. It’s good for commerce, and most importantly it increases confidence on the economic front that both Pakistan and India are committed to moving the social and trade agenda forward.”

I immediately thought of one thing: is this going to make it any easier to get Shan masala for my white chicken korma? I’ve been using this spice mix, imported from Karachi and by far the best I’ve ever tasted, since arriving in New Delhi in 2008. I tried it at a friend’s house, and she revealed — in whispers — that it came from “over there.” She never knew when her butcher would have it but promised to send me a couple of precious packets. Since then, I sometimes see it in the market, and when I do I always get as much as I can. Over the last three years, relations between India and Pakistan have gone from wary to openly hostile to extremely tense and now back to wary, but those ups and downs seem to have absolutely no bearing on the availability of my favorite masala.

I doubt that’s going to change now. Regardless of whether relations between India are warming or freezing, the Indian company in Ghaziabad that imports it is just as vulnerable to the vagaries of getting customs clearance at the border, securing business visas for its employees and passing its trucks through security checkpoints on the way to New Delhi. And Indian goods going the other way will still face these significant “non-trade barriers” even with MFN status. Those variables on the ground are all subject to the two countries’ political pressures, and those haven’t changed. During the cabinet meeting in which the decision on MFN status was announced, Pakistan’s information minister and commerce secretary were grilled about why India was getting MFN status when Kashmir remained unresolved. Here was the reply:

“Pakistan’s strategic interests and the Kashmir cause will not be compromised by taking care of our economic interests and granting MFN status under the obligations of the World Trade Organisation,” Information Minister Dr Firdous Ashiq Awan and Commerce Secretary Zafar Mehmood said while briefing the media after the cabinet meeting.

From the Indian side, despite MFN status for Pakistan and years of promises to improve trade between Indian and Pakistani Kashmir across the Line of Control (LoC), the free flow of goods is always trumped by India’s security concerns. To stop the flow of counterfeit Indian currency, which India believes is used to fund the activities of jihadi networks targeting it, the cross-LoC trade is limited to barter. As Anita Joshua explained in the Hindu recently:

“Presently, trade takes place twice a week on a barter basis in the absence of banking facilities to transfer funds across the LoC, and is restricted to 21 items. Traders from the two sides cannot meet, making the prevalent regime a ‘blind trade’ system in which the trader has no way of assessing the market. Those on the Indian side have it even worse because of the 21-year-old ban on international direct dialling from within Jammu and Kashmir to any part of Pakistan. As a result, they use relatives in a third country to deal with traders across the LoC or exchange business cards through truck drivers to build a database of trading counterparts. Recently, this issue was partially addressed with the installation of a few telephone hotlines.”

Is MFN status a useful symbolic move, as it tries to get talks back on track? Sure, but not much more. I’m down to my last box of Shan masala, and I’m stocking up.

Jyoti Thottam is TIME’s South Asia Bureau Chief, based in New Delhi. Find her on Twitter at @jyotithottam. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIMEWorld.

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