Arun Nanda, Director of Mahindra Group, traveled to Pakistan in April, in the thick of election campaigning. He assesses the business prospects of India-Pakistan trade, and says he is cautiously optimistic. A successful business engagement he says, depends on new Prime Minister Nawaz Sharif’s ability to lead a government without military interference. He shares his views with Gateway House’s Manjeet Kripalani.
Q: What are the bilateral business prospects?
There is a huge market in Pakistan for Indian tractors, farming implements, SUVs. The huge power shortage means there is also opportunity for the solar business, which we as a company have recently entered. And there’s information technology that India can export.
In reverse, India is a ready market for cement and textiles from Pakistan; it’s just across the road from us.
Q: Can India and Pakistan use agricultural collaboration as a diplomatic Confidence Building Measure (CBM), instead of using the usual nuclear and military issues as the basis for CBMs?
Certainly the opportunity for us is huge. Once trade borders are open, it will give rise to different confidence-building measures. But not immediately; it will take time for such CBMs to mature.
Q: In which areas can India and Pakistan think seriously about joint ventures, whether in their respective countries or abroad, like in the Gulf?
I don’t think we are ready for joint ventures yet. We will have to start with trade, build confidence, then think about joint ventures. When they do happen, they can be in auto and engineering goods like pumps and electric transformers. Pakistan does not have a developed engineering industry; and there will be much value-addition from the Indian side.
Over time, infrastructure companies will do well in Pakistan.
Q: What is your big concern for Pakistan at this time?
My big concern is this: will the military and the ISI allow Nawaz Sharif a free hand to run the government or will he have to work with their guidance? How will Imran Khan manage in the Khyber-Pakhtoonwa region where he has won – will they let him operate in a democratic manner?
Q: Our populations are friendly enough; can we think more concretely and in a time-bound manner about our bilateral engagement?
We will have to wait a year or two to see how things settle down. In the meantime, we should begin with trade, where goods can be exchanged and sold robustly.
Q: There are opportunities now for India to be included in the pipelines and routes being built – like the Turkmenistan-Afghanistan-Pakistan-India pipeline, the recently-signed Iran-Pakistan pipeline, the Afghanistan-Pakistan Transit Trade Agreement. How do you view their potential – and the possibility of them continuing to be held hostage by U.S. sanctions?
Of course the U.S. will continue to resist these efforts. But if Pakistan can secure the oil and gas pipelines, then it will show that it is really ready for business.
Arun Nanda is a Director at the Mahindra Group.
Manjeet Kripalani is Executive Director at Gateway House
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