India plans to seek Pakistan's approval for export of all goods from the country through the land route to make the recent removal of ban on most Indian goods more effective.
An official, who did not wish to be named, told ET that India may allow Islamabad use of safeguard measures such as short-term additional import duties in case imports of particular products rise beyond reasonable limits.
Commerce secretary SL Rao is likely to discuss the issue with his Pakistani counterpart Munir Qureshi when the two meet next month to take further the trade normalisation process that started last year, the official said.
"We will try to convince Pakistan that it will be easier for both countries if it allows all goods being imported from India through the land route. It is so much more complicated, expensive and time-consuming to send goods via the sea route," the official said.
Earlier this year, Pakistan had scrapped the positive list of imports that allowed less than 2,000 goods to be imported from India. It has since moved to a negative list that disallows import of just 1,123 items, allowing more than 7,000 products to be imported.
However, Pakistan allows only 137 items to be imported through the Wagah-Attari land route. The rest have to go via the sea route to Karachi through Mumbai and Dubai, increasing transportation and transaction costs manifold.
"The restriction imposed on trade through land route by Pakistan is a serious one. It is certainly the cheapest way of doing trade," said Nisha Taneja, professor, Icrier. Exporting to Pakistan from Delhi through the Delhi-Mumbai-Karachi route is 3.1 times more expensive in terms of transportation costs and 2.7 times more expensive in terms of transaction costs than the direct route between Delhi and Attari, according to a research paper by Taneja.
The Punjab committee of industry body PHD chamber of commerce and industry, which has a lot of business interest in the neighbouring country, has been making a case for greater trade through the land route.
Pakistan may be apprehensive about a possible deluge of goods from India if it opens its land route to all goods, but Indian officials say adequate protection measures can take care of that. "We may suggest that they impose safeguard duties on our imports beyond reasonable limits," the official said.
Safeguard duties are imposed over and above normal import duties to check imports of identified commodities.
In the joint communique signed after the two commerce ministers met earlier this year, Pakistan had said the issue of allowing more products through the land route would be referred to the Cabinet after adequate capacities were created at the Wagah-Attari border.
India, however, says that with the inauguration of the new integrated check post or ICP and more coming up, capacity is not the issue.