The Business Of War

It was not just an Indian Airlines plane that was hijacked. Also held hostage now is any possibility of development of trade in the South Asian region, especially between the two biggest neighbours.

"It’s an unfortunate fallout of Kandahar. Talking business with Pakistan is almost over. There cannot be any talks when there is a situation of complete distrust," admits a senior aide at the PMO, adding: "The odd trade might continue but in terms of concrete business plans, I do not think Pakistan has left any scope."

CII, which had been working towards improved Indo-Pak trade relations, agrees. The association had even sent a delegation to Pakistan last year to explore business possibilities, especially in infrastructure. Says Sushanta Sen, CII’s deputy director general: "We had been extremely serious in our approach and had stressed the need to discuss and develop long-standing investments in Pakistan. A few months later, the ministry of external affairs even started considering proposals for visa-free visits to Pakistan by businessmen and we also planned a trade fair exclusively for Pakistani firms. But all that’s now in cold storage."

Diplomatic observers admit Islamabad’s current stand on Kandahar will also affect the proposed South Asian Preferential Trade Agreement (SAPTA) mooted by India a few years ago as part of the business agenda of SAARC. New Delhi had initially envisaged increased trading and business to the tune of Rs 150 crore in the first year itself. And expectedly, moves to develop business between the two largest nations in the region assumed importance. Hopes for that have now faded. But perhaps some cold comfort can be taken from the fact that barring cross-border trade with countries like Nepal, Bangladesh and some trading with Pakistan and business ventures in tea estates of Sri Lanka, SAPTA was more or less a non-starter as Indian business houses remained wary of Islamabad’s intentions to allow the setting up of proper business establishments.

For example, the Rs 1,200-crore Dabur group had filed an application with the government to set up operations in Lahore to produce its Amla brand of hair oil and Hajmola tablets. But the business house shelved the proposal and continues its supplies to Pakistan from its Dubai operations. "We have almost stopped trading with Pakistan. It’s a very, very small market. A few years ago, we were sending huge consignments of soya husks but that too has stopped," says Abhinav Rahul, the Dabur spokesperson. But he’s quick to add, "We have not stopped selling our products in Pakistan, which would mean losing the market to someone else. But whatever interest we had to develop a market (with common links) is all over."

Forget fast-moving consumer goods, even the lucrative sugar trade between the two neighbours has fallen victim to the current imbroglio. The government last week banned import of sugar from Pakistan, which was a huge 600,000 tonnes in 1999. While that move has delighted the Indian Sugar Manufacturers Association (ISMA) at least for the moment, it is also concerned about the long-term impact of the ban on bilateral trade. "I am not for banning the trade, because a few years ago we used to regularly export sugar-up to 300,000 tonnes-to Pakistan," says ISMA chief S.L. Jain. "At the same time, we cannot shut our eyes to reality. As the situation stands today, there cannot be any talks for business with Pakistan." However, he hopes pragmatism will dictate future trends. "Hopefully, in the longer run, the two nations will need each other and good sense will prevail," he says.

But diplomatic observers are not too optimistic. They feel that not just sugar and oil, the hijacking drama has also put to rest any hopes for importing gas to India from Central Asia via a pipeline passing through, among other countries, Pakistan. "The non-cooperative attitude of both the Taliban and Islamabad spells bad news for India, as well as a host of global oil majors," says a source in the ministry of external affairs.
Not to say the South Asian region.