India, Pak to start power, petro trade

Plan To Transfer 500MW From Amritsar, Surplus Diesel From Bathinda Refinery

New Delhi:India and Pakistan are strengthening business links in 2012, with the stage set to start trading in electricity and petroleum products. 

    Officials from the two countries have decided to trade in electricity through a specially-built high voltage direct current link between Amritsar and Lahore. The plan is to transfer 500MW through the Punjab border with the tariff linked to the market rate. 
    The proposal is awaiting a clearance from the defence ministry before an agreement is signed. 
    In addition, talks will start in the second week of January on a 200-km pipeline originating from the Bathinda refinery to move surplus diesel from India to Pakistan. Sources said discussions at the commerce secretary level have taken place, and now specialists from the two countries would thrash out the details, when a delegation from across the border visits the country. 
    The Guru Gobind Singh Refinery Project — being jointly built by Hindustan Petroleum and LN Mittal's Mittal Energy Investment Pvt Ltd Singapore — is expected to go on stream shortly and add to the country's surplus refining capacity. In contrast, Pakistan faces scarcity and will have quicker access to fuel. 
    Officials said that HPCLMittal Energy will gain as the cost of transporting fuel through a pipeline will work out be much less than shipping it. 
    The contours of the deal are expected to be finalized over the next few weeks, and may be announced when commerce and industry minister Anand Sharma visits Pakistan in mid-February with a business delegation. Apart from minister-level and business-to-business talks, the government has also lined up an India Show to strengthen the recent bonhomie on the trade front. 
    In February, the Pakistani side is expected to end the present system of allowing trade in only around 2,000 products and replace the positive list with a negative list. India is pushing for a small negative list of around 200 items where trade will be restricted. 
    By October even this list is going to be phased out, and Pakistan will move to a World Trade Organization-compliant mechanism and grant Most Favoured Nation (MFN) to India, almost 16 years after New Delhi granted the benefit to Islamabad.
ENERGISING TIES 

• The proposal for power transfer is awaiting defence ministry clearance 

• The petrol trade deal may be announced when commerce and industry minister Anand Sharma visits Pakistan in mid-February 

• In February, the Pakistani side is expected to end the present system of allowing trade in only around 2,000 products