China and India have a way of separating thorny questions of geo-politics from practical matters of trade. It’s a diplomatic strategy that, despite its obvious limitations, has helped keep border disputes at a minimum and enabled the rivals to try to maximize the economic benefits of living side by side. If there is one takeaway from President Asif Ali Zardari’s April 8 visit to India, it is that we might be seeing more of this pragmatic approach to diplomacy in the troubled realm of India-Pakistan relations.
It is clear that both sides could benefit from a shift in strategy. Trade between the neighbors presently stands at a measly $2.7 billion (as opposed to around $70 billion between India and China). The Confederation of India Industries estimates that if barriers were erased, trade between the two countries could reach $10 billion by 2015. Dr. Mohsin S Khan, a former director of the International Monetary Fund, recently estimated that trade between the two nations could be as high as $40 billion if restrictions were eased. By his count, Pakistan accounts for less than .5% of India’s trade while New Delhi accounts for 3% of Islamabad’s total, leaving a lot of room for growth. “Trade is a better route than anything else right now,” said S. Chandrasekharan, director of the New Delhi based think tank South Asia Analysis Group.
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Both sides seemed keen to spin the visit as a step in this direction. Zardari called the talks “fruitful,” and Singh spoke of exchanging “views on all bilateral issues which affect the relation between India and Pakistan.” But obstacles remain. Chief among them is the question of Pakistan’s alleged support for militant activity on its soil. In a press briefing after the meeting, India’s foreign secretary Ranjan Mathai said that Zardari and Singh discussed “the activities” of Hafiz Saeed, one of the founders of the militant group Lashkar-e-Taiba, and the man for whom the U.S. is now offering a $10 million bounty. India believes Saeed masterminded the 2008 Mumbai attacks and has been pressing Pakistan to bring him to books. Pakistan insists it doesn’t have enough evidence to try him. “Courts here are independent and we need substantial evidence against him,” Prime minister Yousuf Raza Gilani said recently.
Lack of clarity on this and other issues has left some skeptical of the would-be diplomatic détente. “Even if this was an official visit it will have had no impact on the real issues outstanding between India and Pakistan, namely terrorism,” said Ajai Sahni, executive director of the Institute of Conflict Management, a New Delhi-based think tank. “These are just opportunities for posturing.” It will indeed be tough for Zardari to convince Pakistan of the benefits of increased economic cooperation with India. “We fear if there is no reciprocation from India then even the limited trade opening that we have now could succumb to pressure because the hard-liners,” said Najam Sethi, one of Pakistan’s top political commentators. But he’s cautiously optimistic. “The Pakistan army had long been against trade with India but now the Pakistani government has been able to persuade the army to give some leverage.” And, in the fraught realm of India-Pakistan relations, that alone could be a “huge breakthrough.”