Trade, can it Herald Peace?

The author correctly points out that the MFN status is irrelevant, given the fact that it will be there next year anyway under the WTO clause.
The Pakistani fear of being swamped by Indian products is quite understandable. It was not too long ago that Indian manufacturers expressed similar fears about opening up to others, especially China. And there is absolutely no doubt that some of the Pakistani manufacturers will go under if forced to compete with the Indians. But those who do survive will be much more efficient, will have excess to a much bigger market and prosper, just as Aabida Pravin, Ghulam Ali, Mehdi Hasan, Junoon and others have prospered in the bigger Indian market.

Even now, Pakistanis are successfully competing with Indians in at least two areas that we all know - ready-made garments and sports goods. Both Pakistan and Bangladesh probably export more proportionally than India in ready-made garments and their quality is as good or better as those of Indian products. And while I dont know for certain, I would presume that they produce electricity moe efficiently than the Indians do.

My wife bought quite a few pieces of fabric in Lahore`s Gulberg district - especially chikan and cut-work - and I am sure she wouldn`t have bought them if they were not better and/or cheaper than in India.

But Pakistan will probably need to build some time-bound safeguards to give time to its vulnerable industries to adjust to this new competion while the playing field is levelled by their having access to the same raw-material, machinery and other factors of inputs as their Indian competitors.

veeresh:
Do Tatas already own Daewoo? The last I read (two months ago) they had merely signed an agreement to buy it.

veeresh

ownership of tetley by tata does not mean that the tea is indian. it could be kenyan. same case for hindujas, and tatas owning daewoo. so you have to use some other argument than that of owenership.

i think paki pickles will do wll in india. i have tried ahmed pickles in the us and found them to be better (better quality and quantity of oil floating on top) and cheaper. so there is something indians surely have to do better. also i heard that pakistanis are good at making homemade guns etc (kattas). they will find a ready market in moolganj of kanpur and most parts of bihar and eastern up.

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i agree with ``asman``..the point i`m trying to get across is that trade with india will result in pakistanis paying less for the same quality goods.India has gone global now and has been forced to compete with the rest of the world as far as trade is concerned.Indian manufacturers cannot get away with passing off shoddy goods to a captive market.Foreigner cos. compete with indian cos. on our home turf.Hyundai india sold 311456 cars in the indian market alone in 2003.Anyone interested in cars check out the website ``autoindex`` which can be accessed thru google.This can be true for any goods or services.

Chowkies:

Please take easy on poor arjun_m for today. He has lost his batchi khutchi poonji as Bombay Stock Exchange shedded a whopping 113 points today. This shock is in addition to his being jobless in America for last 4 years now.

I had pointed out in another topic`s interactive real estate that Pakistan will find its products very difficult to sell in India primarily on psychological reasons.

For the past 12 years, Indians have been living under a constant vicious propaganda against Pakistan by their fundamentalist Government. On the contrary, Pakistanis generally don`t have any deep rooted hatred against Indians. This argument has consistently been made by the likes of Feroz, romair and others on this website. Hence, when Indians visited Pakistan recently, they were consistently ``overwhelmed`` by our hospitality, moderation and desire to live peacefully.

No matter what, Indians will not buy Pakistani products till such time their pre-conceived notions and perceptions about Pakistanis are adequately addressed and reversed towards reality. Unfortunately because of the level of propaganda against Pakistan that the Indians have been subjected to, it will take a long time to rectify their attitude.

arjun-m

You get your haemeroids all flared up totally un-necessarily. I am not totally averse to any trade with India. For example, I think Pakistan may import hand tools and machine-tools from India. I have absolutely no idea what their quality would be like but I think it would be definitely better than those which are made in Pakistan (other than those of BECO and PMTF) and sold with made-in-Taiwan stamps. I have a feeling that quality of Indian tools would be better since all machine-tool manufacturing was left on Indian side at the Partition. What did we get? BECO (Batala Engineering Co.) and that is about it. I think cheeper and better quality machine-tools would further improve quality of Pakistani products. Another thing is that these tools cannot be just dumped in Pakistani market like consumer products. And even if they are dumped they will only effect the dinosaurs like PECO (renamed BECO) and PMTF (Pak Machine Tool Fac). These dinosaurs are the reason Pakistani products are not cheap.

So Pakistan must use acute discretion employing the trade relations with India. Therefore, India, cannot and should not be given an MFN status. The import of consumer products, which Vereesh suggests, has no beneficial effect to Pak economy. The cars, the trucks, motorcycles all are made in Pakistan with or without forming foreign conglumerates same as that in India. We are already importing Indian tea but people in Pak prefer Kenyan tea better which is mixed with colored chick-pea coverings and saw dust. tastes as good.

Omar ji # 12 . . . and others, I go walkabout, I have tea with drivers and mechanics, I visit automobile garages, I open bonnets, I observe tyres . . . I even track route for stolen cars into Pakistan from India!! No assumptions, gentlemen, only facts.

A few decades ago, India was afraid that the Japanese would swamp Indian markets. Some years ago it was the South Korean threat. And more recently, Chinese.

In all cases, it just made the Indian Indian manufacturers more competitive and the foreign Indian manufacturers had to bring their prices down. Drastically. Big big manufacturers in India talk about monthly nett profits of 1 through 2 percentage points on monthly turnover as ``efficient``. I do not know what numbers industrialists talk in Pakistan?

Now, on to Indian entities with a presence in Pakistan, in line with their global aspirations, and why not?

a) Tetley is a Tata owned and controlled company.

b) Daewoo Heavy Vehicles, which includes Daewoo trucks and buses, are 100% owned by Tata. Even the bus operators now call the Lahore - Islamabad Motorway the ``Daewoo-Tata Motorway``. There seems to be some sort of ruggedness associated with Tata trucks/buses, by the way, in Pakistan. I think it emanates from driver`s experiences in the Gulf.

c) Hyundai has focused Santro manufacture, fully built up as well as CKD/SKD kits, in India. As a matter of fact, after the troubles in South Korea, Chennai was the only plant making Santros. Yes, the previous ``Atos`` type Santro, the one with the ``straight`` back, was imported from South Korea. Now it is sent in kit form from Chennai. Via somewhere, sure. I mean, Valetta in Malta cannot consume so Indianmany cars, can it?

d) Hino, Iveco and Ashok Leyland share a common ownership, Hindujas. The ``Hino`` in ``HinoPak`` derives from Hino.

e) Reliance, well, what does one say? Internet, aviation fuel . . .

But my point is - why not buy directly? Now THAT is the million dollar 10% question!!

Over to you, Omar ji.

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Recently, I had a dubious honor of meeting with some people at a social gathering, who were in textile business and called themselves Cloth merchants – wholesalers and retailers. According to them India has already started dumping its textile products in Pakistan, especially un-sewn cloths. I asked them why they carried an Indian product anyway while we have one of the best textile product-line in the world. One of them replied that India is dumping clothing products at a price, which presumably is well below their own cost. This enables them (the cloth merchants) to offer ridiculous amount of discounts to their customers. The customer base in this line of business is overwhelmingly female. Even for males the buyer is female (they have to chose among gray, beige, and off-white anyway). And it is in the psychology of female customer that she won`t pick up merchandised unless she bargains it and gets discounts. Therefore, they argued that, an Indian product is easier and profitable to sell. Another gentleman who was not in the clothing business and holds a very low opinion about mother and sister of the government (any government) argued ``bha ji, at least now poor people would be able to buy with some relief, this (expletive) government, on the other hand, is determined to starve people (expletive)``.

I argued that if we let it go on like this, it would effectively eliminate the local competition for good. Our counter-dumping in India might not work because our quality products are out of reach for Indians masses anyway. ``So what would happen after couple of years?`` I asked. ``What would happen to the cotton growers, synthetic fiber makers, textile mills, workers and engineers who work there, textile equipment manufacturers,……..but you guys will be making money anyway, right?``

In reply they just shrugged.

#12 Omar

Veeresh may not be quite right when he says ``Indian made`` Santro cars, but the truth probably lies in between. Most cars today contain ``globally sourced`` components and assemblies. Hyundai`s Chennai plant and its vendors are a global hub for small car assemblies so I am pretty sure any ``Santro`` or ``Santo-like`` car made by Hyundai anywhere in the world has a pretty good chance of having ``Indian-made`` assemblies in them.

Hyundai has a new small car called ``Getz`` which is on sale in UK and Australia. There is talk about introducing it in India and whether India will be a hub for assemblies for this car.

Similar arguments on Hino-Pak issue. It would make great sense for it to have, say axel rods from Bharat Forge or engine blocks from Ashok Leyland. If this is indeed the case or Pakistani`s have made the ``strategic`` decision in the ``nation interest`` I dont know.

(If someone is more knowlegeable about the Pakistani automobile industry or has taken their Mehran-Suzuki or Hyundai-Pak apart please chip in)

btw, Tetley UK is owned by TATA`s.

Trade and terror,

News items say that most of the consumer goods in pakistan are expensive compared to that in india. Take pharmasuitical drugs, they are around ten times more expensive, it is because the manufacturers, the middle men are siphoning the profits. The same with other consumer goods and it is the final consumer the poor who is carrying the burden. The exhorbitant profits have created the very rich of pakistan and has increased the demand for luxury goods. This is what typically takes place in every islkamic countries, poor and the very rich, the rich create the demand for imports which consumes the foreign exchange, while the domestic indisutries for consumer goods cannot flourish because of the low demand from the poor, in the case of pakistan, from the increasing number of the poor.

In the above circumstance as in pakistan, lower price of goods, made available through imports will increase the disposable income of the poor. This will be diverted to contributions to the mullah at the mosque, to the collection boxes, to the trip to madreke to meet the laskers.
Low cost imports to pakistan will be bad for india, it will be bad for pakistan and it will be very good for the jihadis, that is bad for the world and terrible for man kind.

No there should be no trade with pakistan, but is OK as long it is trding of bullets, may one sided dropping of daisies of the cutter variety.

santro cars are not from chennai -- veeresh sahib as usual you fail to understand things and bases everything on your presumptions -- hyundai must have a plant in chennai but the cars in karachi or lahore are not from that plant but from the one outside karachi -- ever heard of joint ventures? hyundai has one with dewan motors in pakistan and thats how we get our santro cars -- hinopak is another example - joint venture with a japanese firm -- might look like an ashok leyland but isnt the same thing -- as for tetley tea -- again a joint venture between tetley UK and a local pakistani firms -- read below plz -- it seems your patronizing comments will never stop -- about how big-hearted india is and how pakistan is refusing to either acknowledge such big-heartedness or how Pakistan chooses to ignore it -- arjun m -- your nothing but a pure paki-basher so would be silly to reason with you -- but one thing, no pakistanis are not genetically predisposed to buying inferior goods -- its just that big business tends to take consumers for a ride, just like elsewhere -- tell me something arjun, are indians `genetically predisposed` towards prejudice and bias against pakistan? -- and lest i be accused of starting something, plz for the record see that it was mr arjun here who couldnt help make a dig at pakistanis and their `genetic predispositions` -- seriously i am beginning to wonder whether the editors at chowk deliberately try to encourage such interaction by letting such attacks go through on the board



Tetley tea to hit market in first quarter of `04


By Aamir Shafaat Khan

KARACHI, Dec 30: Tetley Clover Private Limited (TCPL) is now planning to introduce Tetley tea in Pakistan in the first quarter of 2004, hoping to capture six to eight per cent share in a market dominated by Unilever and Tapal Tea.

As per previous market reports, based on company`s various executives` comments, Tetley tea was due to hit the market in October 2003 but it had been delayed. According to market sources the delay was caused by late shipments of blending plant and machinery from abroad at Hub, Balochistan.

However, TCPL managing director Zulfiqar Ali Lakhani told Dawn on Tuesday that ``actually October was not the specific time period for the product`s commercial entry.`` ``The new tea is now arriving in the first quarter of 2004,`` he said without giving any specific date of the product launch.

``Our project is well intact and there is virtually no delay in the operation,`` he said adding that the launch of new tea had never been planned for October 2003.

On the market apprehensions that Indian tea giant Tata is actually arriving in Pakistan with a UK based Tetley Tea as its front, the TCPL managing director said Tetley Clover is jointly owned by a combination of interests from the UK and Pakistan.

``It has two British and one Pakistani origin British citizen as Tetley director besides the Lakson`s nominated directors,`` he said. Tata, being a substantially big industrial group, succeeded in bidding for acquisition about two years ago and now has a majority shareholding in Tetley UK, he added.

``Tata, does not, however, has any involvement in the management of the joint venture. The joint venture is being entirely operated by executives drawn from the UK and Pakistan,`` Zulfiqar Lakhani said.

Lakson Group and Tetley UK had entered into a joint venture investment of Rs150-170 million in 2003 to form TCPL, a company incorporated in Pakistan. On price, he said the company is likely to keep the prices of tea at par with its competitors.

A stiffening competition in tea business is likely to be witnessed as the TCPL, in its first year of operation, aims to capture six to seven per cent share from two existing tea giants.

Unilever`s January-September 2003 sales and operating profit surged to Rs7 billion and Rs919 million from Rs6.6 billion and Rs900 million in the same period of 2002. Unilever`s sales by the end of 2003 is likely to range between Rs9-10 billion followed by Rs1.2-1.3 billion operating profit. Another strong contender Tapal also enjoys yearly sales of Rs4.5-5.0 billion.

Tetley Clover has planned to import tea from Kenya and Sri Lanka due to good aroma and taste of tea of these countries,`` he said adding that the company may also use Indian tea for blending.

Pakistan, being the third largest tea importer of the world, mainly imports tea from Kenya, Bangladesh, Sri Lanka, Indonesia, China and some African countries. In 2002, the country imported 97,827 tons of tea ($146 million) as compared to 107,000 tons ($175 million) in 2001. Local tea market comprises 45 per cent of loose tea and 55 per cent of packed tea.

Manufacturing infrastructure,

In the past years, ever since mushy came to power there have been three capital raisings in the pak stock exchange. The NAB have killed off all of industrial activity in pakitan, the textile tycoon was arrested. Textile account for 70 percent of pak exports. There is no industries worth any name unless they are owned by the military. From cement to corn flakes are made by the military. There are reports that some of the weapons facories are makin frodges and other white goods.
Any type of increased trade, that lowers the price in pakistan is bad for the military indutry. India should support the war onj terror by slowly cutting of the economy of pakistan. May be bhutto was wrong, it whould have been pakistanis will stuff cotten every where, but will have the bomb.

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