Indian companies desperate to do business in Pakistan

NEW DELHI (AP) - When Pakistan's prime minister made a rare visit this week to India, plenty of people had little interest in talking about regional peace, or the Kashmir militancy, or nuclear proliferation. 

They had something else on their minds: money.Indian companies are falling over each other to do business in Pakistan - an economic explosion unimaginable just two years ago, when a million soldiers stood facing each other across the two countries' shared border, and the South Asian rivals appeared poised to fight their fourth war. 

Now, even though their peace process often moves along awkwardly, confidence is on the rise - and business is rising with it. 

"There is a huge change in the way Indian companies are looking at Pakistan, and vice versa,'' said Yogendra Kumar Modi, president of the Federation of Indian Chambers of Commerce and Industry. 

Indian companies are exporting sugar, plastic, pharmaceuticals, rubber, iron ore and tea to Pakistan. From across the border, Pakistani businesses send fabrics, spices, fruit and nuts. 

Their two-way trade has jumped from US$157 million (euro120 million) in 1997-98 to US$343 million (euro262 million) during the financial year ending in March 2004. 

Politicians and business leaders on both sides of the border are hoping it goes even higher. 

"Investments and joint ventures could take off in a big way,'' Pakistan's prime minister, Shaukat Aziz, told a room packed with top Indian businessman. 

He spoke proudly of Pakistan's economy, in shambles not long ago, noting its privatisation programme, telecom deregulation and quantum leap in mobile telephone usage. 

It's also geographically well-situated for business, he said, with the Karakoram Highway offering overland routes to China and seaports linking Europe and the Far East. 

After Aziz finished his speech, he faced a surprise question. 

A top executive from the Tata Group, India's largest private conglomerate, wanted to know how Indians could buy state-run companies being privatised in Pakistan. 

Such a question would have been unthinkable not long ago 

The two nuclear-armed nations have fought three wars and remained in a near-daily state of tension for years at a time after independence from Britain in 1947.  

In 2002, after India blamed Pakistan for a militant attack on its Parliament, both countries went on war footing. 

While fighting was averted with intense diplomatic pressure, rail, road and diplomatic links were snapped. 

But earlier this year, India's then prime minister, Atal Bihari Vajpayee, made a tentative reach across the border and contacts were renewed. 

Officials from both countries have drawn up a detailed calendar of talks, including over their principal dispute, the divided Himalayan region of Kashmir. 

While the situation remains rocky, plenty of goodwill has been gained. 

That emboldened businesspeople Wednesday night to ask the visiting prime minister about profit opportunities: How can Indian textile companies set up business across the border? 

What are his plans for Indian pharmaceutical exports?  

How does he plan to expand Indo-Pakistan shipping and rail links? 

The time is over, they said, for circuitous trading. 

"There are Indian companies which are using Dubai to cater to the Pakistani market. Why can't these jobs be created in Pakistan itself?'' asked Modi, the head of the Indian industrial association, in a speech to the group. 

Aziz's brief visit saw a flurry of trade announcements. 

A new joint panel will now explore ways to expand business opportunities. 

India and Pakistan also agreed to reopen branches of state banks in each other's country, closed after the 1965 Kashmir war. 

And during a meeting with India's oil minister, Aziz revived an proposal to build a pipeline through Pakistan to link India with Iran's massive gas fields. 

Some things, though, still remain off limits.When he was asked Wednesday night how Indians could buy state-run companies being privatised, Aziz was less than inviting. 

"The timing is not right,'' he said, indicating the countries had to travel further on their road to peace before that kind of economic intermingling was possible.  

"It's a bit premature.'' 

"This is not a 100-meter dash. This is a marathon.'' - AP 

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