India, Pakistan railways bilateral trade pact agreement needs revisit

The railway contract between India and Pakistan wants to be changed as exporters want to improve bilateral trade, according to the findings of an independent study carried out recently.

The allegation from Pakistan industry is that this is being used as an excuse to discourage imports from Pakistan and protect Indian manufacturers, especially cement manufacturers. In such circumstances, there is a dire requirement to raise the frequency of freight rails between India and Pakistan, along with incorporating containerized goods that is presently not allowed.

The study on Pakistan- India trade, carried out under the USAID trade project, is based on detailed discussions held with customs and trade experts from the public and private industry in Pakistan. It was reported by the Railways that there exists a cross border Pakistan India rail bond, but unfortunately it is regarded as obsolete and in want of fundamental changes given the present interest in cross-border business normalization. The present bond is understood to permit one freight rail per week in all directions over the border and three passenger trains. This is insufficient to meet traders’ demands.

Railway officials of Pakistan and India are required to hold joint planning and discussion meetings on a 6 monthly basis. However, no meetings have been held in the past two years. The present contract stipulates that only covered freight wagons can cross the border and does not take into account future container traffic, according to the terms of the contract.

To vessel by rail from Lahore to the Attari-Wagha is cheaper than to send freight by truck. However, this incentive becomes a disincentive when taking into account the 65 year old rail infrastructure, rolling stock and dire shortage of sufficient locomotives.