Pakistan to resume import of sugar, cotton from India

Pakistan will buy sugar and cotton from India, newly appointed Finance Minister Hammad Azhar announced on Wednesday, lifting a ban on their import from the neighbouring country imposed in the wake of heightened tension over Kashmir in 2019.

The decision was taken at the meeting of the economic coordination committee (ECC), which was chaired by Finance Minister Azhar.

Azhar said that the meeting discussed 21 items on the agenda, including import of cotton and sugar from India, which it allowed after detailed discussion.

The resumption of import of these goods will lead to partial revival of bilateral trade relations, which were suspended after the August 5, 2019, decision of India to revoke the special status of Jammu and Kashmir.

The private sector was allowed to import 5 lakh tonnes of white sugar from India, he said.

He also said that the government had allowed sugar to be imported from other countries, but the price of the commodity in other countries was also high.

“However, in our neighbouring country India, the price of sugar is quite cheap,” he said. “Hence, we have decided to resume sugar trade with India.”

Azhar also said that Pakistan will import cotton from India starting June this year.

Adviser to the prime minister of Pakistan for commerce and investment, Dawood welcomed the decisions taken by the ECC.

“All steps be taken through cross-border imports of cotton yarn including by land. A summary will be presented at the next ECC to ensure availability of cotton and yarn in the coming months,” Dawood tweeted.

Finance Minister Azhar told the media that demand for cotton in Pakistan was increasing but it had not produced quality cotton last year, hence it had given the green signal for the product to be imported from other countries.

“The import of cotton from India was banned and this had a direct effect on our SMEs,” he said. “However, at the recommendation of the ministry of commerce, we have also decided to resume the trade of cotton with India,” he added.

Azhar was appointed as finance minister on Monday by Prime Minister Imran Khan who removed Dr Abdul Hafeez Shaikh from the finance portfolio after his embarrassing defeat in the Senate elections. Azhar is the third finance minister to be appointed since Khan came to power in 2018.

Earlier, in May 2020, Pakistan lifted the ban on import of medicines and raw material of essential drugs from India amid the Covid-19 pandemic.

The ministry of textile had sought permission from the ECC to lift the ban on import of cotton and cotton yarn from India in a bid to bridge the raw material shortfall for the value-added textile sector.

The ministry of commerce separately asked for permission to allow import of white sugar from India through the Trading Corporation of Pakistan and commercial importers.

Official sources in Islamabad said that Prime Minister Khan as minister-in-charge of commerce and textile had already approved the reports placed before the ECC for allowing import of cotton and sugar from India.

“It shows that there is no technical or legal hindrance for importing these items from India,” a source said.

Tension has come down between the two nations after the restoration of ceasefire on the Line of Control last month. It was followed with an exchange of letters by the prime ministers of the two countries.

It is said that the two sides are working behind the scenes to restore their full diplomatic ties which were downgraded after the August 2019 action in Kashmir.

India’s move to revoke the special status of Jammu and Kashmir in August, 2019 angered Pakistan, which downgraded diplomatic ties with India and expelled the Indian high commissioner in Islamabad. Pakistan also snapped all air and land links with India and suspended trade and railway services.

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