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    From Tehelka Magazine, Vol 9, Issue 33, Dated 18 Aug 2012
    CURRENT AFFAIRS  
    INDO-PAK TRADE

    The door’s open for beer diplomacy and much more

    By Kunal Majumder

    Three cheers Murree Beer will soon be available in Punjab’s pubs

    Photo: Reuters

    THE BATTLE between Kingfisher and Murree Beer will soon become a reality in the hinterlands of Punjab. Murree Brewery, Pakistan’s oldest and finest alcohol-maker, has been knocking on Indian doors for a long time, albeit unsuccessfully. Murree Brewery CEO Isphanyar Bhandara even approached Indian liquor baron Vijay Mallya’s United Breweries for help but nothing materialised. With the Indian government allowing Foreign Direct Investment (FDI) from Pakistan, Bhandara’s dream will finally come true.


    Pakistan’s Economic Committee on Trade has already allowed Murree Brewery to export beer to India. “We are hoping to export our beer to Indian Punjab. Currently, we are looking for Punjab-based importers,” says Bhandara.

    It is not just Pakistani alcohol; we might soon be withdrawing money from Pakistani banks in India. Pakistan’s richest man and Muslim Commercial Bank (MCB) Chairman Mian Muhammad Mansha has already applied for permission with the State Bank of Pakistan and the Reserve Bank of India to set up branches of his bank in India. “Our rationale for doing business is that India is a very profitable market,” Mansha was quoted as saying in the Financial Times.

    Entrepreneurs from across the border got a taste of things to come in April, when India hosted the largest-ever Pakistani fashion trade fair on its soil. Lifestyle Pakistan attracted some of the biggest fashion, jewellery and textile brands. At the end of the four-day affair, almost all the counters displayed a “sold out” sign at New Delhi’s Pragati Maidan.

    Manal Faheem Khan, who was one of the exhibitors, recalls how excited the Pakistanis were to see the response from Indian consumers. “We do export our garments sometimes but we thought, ‘why can’t we directly open stores in India?’” she says. With India allowing FDI from Pakistan, it will be possible for Khan and other retailers to open their boutiques in New Delhi or Mumbai.

    Business tycoon and former Karachi Chamber of Commerce and Industry president Majyd Aziz says it is entrepreneurs like Manal Khan who will be among the first to invest in the Indian market. “Textiles is an area where Pakistan has done a lot of innovation and might want to expand in India,” he says.

    Former Bombay Chamber of Commerce and Industry president Ashok Barat agrees. “Pakistan has done some great work in textiles but they will have to enter into joint ventures with Indian partners due to our past differences,” he says. The reason is due to decades of misunderstanding “which will disappear only when we work together”, he adds.

    Apart from textile, sectors such as energy and cement might see a lot of Pakistani interest, say businessmen from both countries. But neither Indians nor Pakistanis are expecting huge investments from Pakistan at the outset. “In the first year, we might see only a few million dollars in FDI,” says Aziz.

    Trade between India and Pakistan amounts to $2.2 billion, out of which Pakistan’s export share is $280 million.

    But the idea of healthy Indo-Pakistan business interaction doesn’t hinge only on India allowing FDI from Pakistan, says AH Imam, assistant professor of Law & Policy at the Lahore University of Management Sciences. Imam feels that the biggest turning point in business relations will be when the Reserve Bank of India allows Indians to invest in Pakistan. “Pakistan never had restrictions on Indian investments but your central bank never allowed Indian money to flow into Pakistan,” says Imam.

    Aziz has a similar view. “I would not call allowing Pakistani FDI into India a landmark decision. It is a good decision, but the landmark decision will be when the Indian government allows Indians to invest in Pakistan,” he says.

    Kunal Majumder is a Principal Correspondent with Tehelka.
    [email protected]


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    From Tehelka Magazine, Vol 9, Issue 33, Dated 18 Aug 2012
 

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