Removal of Pakistan from the Most Favoured Nation (MFN) status is not a knee-jerk reaction post-Pulwama terror attack but a well-calibrated and calculated tactical decision aimed at squeezing Pakistan not only economically but also to increase its dependence on third country ports for import of consumer items like fruits, vegetables and wheat flour besides medicines and raw materials for the textile industry among others which in turn will lead to cost escalation in the Pakistani market.
Dependence on ports of other countries will lead to cost escalation of consumer items especially daily consumer goods like vegetables and grains leading to scarcity and subsequently unrest. Before, the removal of Pakistan from the MFN status, the goods were sent from India via land ports and transport cost was negligible with a nominal tax by Islamabad on imports from India, making such products cheaper for the Pakistanis.
Due to MFN, Pakistani exports to India were duty free but now India has slapped a duty of 200 per cent, dissuading the importers here from picking up the goods. This will also adversely hit the Pakistani exporters negatively as they will be deprived of a sizeable consumer base here.
While India had unilaterally extended the MFN status treating Pakistan as a SAARC member, Islamabad had not reciprocated.
Assessments here suggest, the imports will be limited to the supplies for the companies owned by Pakistan Army amid soaring prices and the general people will be bound to suffer due to unavailability of daily need consumables.
When unrest will increase on the issue of scarcity of the consumer items, the Pakistan-based insurgent groups and the miffed locals may start hitting the logistics chain for such imports, sources here said.
As much as 85 per cent of the medicine market in Pakistan was dependent on Indian exports and the textile industry was dependent cent per cent on raw material imports from India. After the removal from the MFN list, goods will be exported to Iran and then re-exported to Pakistan and in the process the items will be costlier.
Counter-terrorism expert Dr Rituraj Mate said, “UAE ports may not be viable due to high tariff for sending consignments to Gwadar port. The tariffs at ports of UAE are higher as they have been in existence for significant period. This will lead to dependence of Pakistan on the Chabahar port of Iran which being new has a lower tariff base. Same is the case for Gwadar.”
With a sizeable investment in development of Chabahar port, India will gain by getting tariffs on the goods exported to Pakistan. Once this trade course takes shape, the Chinese, who own the Gwadar port will also ultimately benefit by handling such cargo from the Iranian port.
With an increasing cargo receipts by the Gwadar port, the Baloch groups may also demand royalty on such imports for exploiting the port infrastructure. In such a situation, Al Qaeda affiliates JeM and LeT will also start targeting the logistics chain as their funding will be hit amid a negative economic environment.
Increased trade via Chabahar-Gwadar ports will create a win-win situation for both India and China to the detriment of Pakistan, sources said.
In the backdrop of economic measures against terror sponsor Pakistan, Indian consumers have turned dead against Pakistan. If this mindset, especially in the aftermath of Pulwana suicide on February 14, continues, the sentiment will subsequently turn against all such countries that support Pakistan financially or carry on business relations with it.
Given the continuous backing both in terms of funding and military hardware by US to Pakistan besides inaction against even sanctioned terrorists like LeT chief Hafiz Sayeed and his deputy Abdul Rahman Makki and others, the anti-US sentiment is also likely hit American companies as well.