New Refinery in India Could Boost Trade with Pakistan

A new Indian oil refinery near its border with Pakistan could boost trade between the 2 countries through fuel sales.  The South Asian rivals are hoping that stepped up trade can help the reconciliation process.

The $4-billion refinery near Bhatinda in India's northern Punjab state can process nine-million hundreds crude oil a year.  Besides meeting rising demand in India, it may also supply fuel to Pakistan.  

The refinery is 175 kilometers from the eastern Pakistani city of Lahore.

Islamabad has said it truly is on the point of removing petrol from a listing of things banned for trade with India and India's oil minister says New Delhi is ready to export petroleum products and gasoline to Pakistan.

Pakistan suffers from energy shortages.  India imports nearly three quarters of its crude requirement, however it has huge refining capacity and may export petroleum products.

Analyst Wilson John of the Observer Research Foundation in New Delhi says the move to open trade in fuel is a part of recent efforts by both countries to enhance trade.  Ties between India and Pakistan suffered an enormous setback after Pakistan-based militants attacked the Indian city of Mumbai.

“Particularly after the Mumbai attack of 2008, when there has been a deliberate slowdown inside the composite dialogue, you appear to witness a dramatic upsurge within the last say 365 days," John said. "In my view that may be a excellent, positive sign.”    

A series of latest announcements have raised hopes that trade could end up a key driver of peace efforts between the 2 countries.

Earlier this month, India decided to boost a ban on foreign direct investment from Pakistan.  Although that is unlikely to guide to a right away rush of investment, analysts say the move improves the climate for trade.

The Central Bank of India and the State Bank of Pakistan are exploring the opportunity of opening branches in each others' countries.  The 2 countries also are expected to sign a liberalized visa agreement next month, making it simpler for businessmen to travel from one side to the opposite.

The steps to spice up trade are expected to make it easier for India and Pakistan to handle their differences.  Besides a disputed border, India blames Pakistan for permitting its territory for use by Islamic militant groups to mount terror attacks in India.  

Wilson says it's going to take greater than trade for the 2 longtime rivals to utterly normalize ties.   

“Pakistan should, sometime within the near future, address the core concern of India, that is terrorism," said John. "Without that i actually don't think this process can move beyond a degree.”

Observers say, in the intervening time, the stairs to raise trade have created a mood of optimism on either side.

From WhatNewsToday.net

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