According to sources, the growers are scared about the tariff structure and non-tariff barriers as technical hindrance to compete the neighbouring country. They however are confident about the quality and standard of agricultural products. According to a fresh study/report, made available by TDAP, in general, Pakistan's applied tariffs on agricultural products are lower than India. Islamabad's average tariff rate works out to 20 percent whereas in India it is 33 percent. In addition, India also levies education cess of 3 percent on these products. Pakistan however, allows import of several agriculture products between 0 to 5 percent duties where India is competitive such as vegetables. India does not do so for those products such as kinnow where Pakistan is competitive. Indian duty on fruits ranges from 30 to 50 percent.
India is one of the biggest subsidisers of agricultural inputs. For example, India pays fertiliser producers directly in exchange for the companies selling fertiliser at lower than market prices. Irrigation and electricity are supplied directly to farmers at prices that are below the cost of production. These policies result in effective subsidies to farmer of 40 to 75 percent for fertiliser and 70 to 90 percent for irrigation ad electricity.
India's sanitary and phytosanitary (SPS) regime is rather strict. There are many other restrictions on import of agriculture products. Many international studies show that these measures are used to restrict imports rather than for any scientific reasons to control crop related diseases.
India has high WTO bound tariffs and it often adjusts its applied tariffs periodically to help meet domestic price stability goals; either raising tariffs to help strengthen producer prices or reducing tariffs to help moderate rising consumer prices. Pakistan also follows this policy but only for major products such as sugar and wheat. For major agriculture produce such as wheat, rice, sugar and cotton status quo may have to be maintained. In these cases, it would be best if the situation were reviewed each year depending on local crop conditions.
In addition to these constraints, the process of obtaining permission for exports/trade and other impediments on the way of trade handling with the neighbouring country were also not easy as compared to other countries. According Abdul Wahid leading exporter of fruit and vegetable told Business Recorder that a request for issuance of permit to a truck of Pakistani kinnow, which was aimed to be displayed in the forthcoming food exhibition in India, was not granted by Delhi for unknown reason.
Though, according to him, some Indian press carried a report that exporters there were willing to introduce Indian kinnow in Lahore after the MFN status, the concerned traders here were still not confident that they could export the fruit even after the normalisation of the trade. "We are ready to compete with India in the fruit and vegetable sectors provided the level playing field," he added.