Emphasising that easing of visa restrictions is no precondition for the continuation of trade talks between India and Pakistan, Pakistani trade minister on Friday said the issue of granting non-discriminatory market access (NDMA) to India and resuming trade through the land route would be resolved soon.

However, despite an assurance on these issues, Pakistan's commerce minister Khurram Dastagir Khan said that the composite talks between the two nations were halted because of the involvement of foreign affairs ministries. “We can’t give a timeline on resolving the issues but trade talks hit a wall when other ministries get involved. Trade can’t happen in vacuum and it is not only the commerce ministries of two sides which can take trade forward. The fact is that the composite dialogue is suspended as of today,” Khan said at the India Show organized by the Federation of Indian Chambers of Commerce and Industry.

On a lighter note, he said: “So instead of the two foreign ministries saying will you be my Valentine, talks are suspended. The truth is that visa restrictions are the biggest non-tariff barriers. People and businessmen are not able to travel to each other's countries. That is the great barrier to trade. There are no preconditions on trade talks".

During Khan’s meeting with commerce minister Anand Sharma last month in New Delhi, India and Pakistan had agreed on an NDMA programme in place of the most favoured nation regime besides opening up Wagah-Attari border round the clock.

Pakistan has refused to state a clear time-frame to grant non-discriminatory market access to India (NDMA) but says “talks are progressing fast.”

Blaming the foreign ministries of both countries for suspending wide-ranging talks, Khurram Dastgir Khan, Pakistan’s commerce minister, on Friday said other ministries on both sides of the border needed to work together to enhance trade relations between the two neighbours whose economic relations are blocked by concerns on security and a history of mutual hostility.

“When you are talking about trade you can go to a certain extent …but when trade starts hitting a wall, other ministries in the government are also involved ...that’s the issue and we have to resolve it,” Khan told journalists in Lahore, where an Indian trade delegation of industry chamber FICCI met counterparts from Pakistan.

Khan noted that the “composite dialogue process” — a reference to the broad-based talks that include everything from the vexed Kashmir dispute to trade tariffs — remains suspended but expressed hope that things will improve soon.

Bilateral trade was estimated at $250 million (about Rs. 1,554 crore at current exchange rates) in 2003 and increased to $2.6 billion in 2013.

Khan pointed out that visa restrictions constituted one of the major barriers in bilateral trade and was being examined by both Indian and Pakistani authorities. Visa restrictions will be brought down considerably although it may not be completely eliminated, he said.

Senior citizens of both countries must be allowed move freely especially in case of place of birth, Khan, who inaugurated the three-day India Show at Lahore, said.

FICCI officials emphasised the need to look into the issue of increasing the operating hours of customs from the current 12 hours to 24 hours throughout the week.

India and Pakistan Saturday decided to take a few more steps by the end of next month to normalise trade. This includes opening of bank branches in each other’s countries.

After talks here, trade ministers of the two countries agreed also to facilitate commerce over land by keeping the Attari-Wagha border open 24 hours throughout the year.

“Central banks of the two countries in principle have agreed to give banking licences to banks nominated by respective governments,” Commerce and Industry Minister Anand Sharma said at a joint press conference with Khurram Dastagir Khan, Pakistan’s commerce minister.

Earlier reports said the two neighbours were working on allowing three banks to set up branches on each others’ soil to help improve business relations.

The talks which took place after a gap of 16 months, however, did not yield Pakistan formally according the Most Favoured Nation (MFN) status to India.

Both ministers voiced the commitment of their governments to provide what they called Non-Discriminatory Market Access (NDMA) to each nation’s goods and services to establish normal trading.

“Let us not (get) stranded on nomenclature,” said the Pakistan minister when asked about MFN.

The ministerial meeting was held on the margin of the SAARC Business Leaders Conclave, which was preceded by consultations at the level of the Secretaries Commerce of the two countries.

The ministers emphasized the importance of trade facilitation and directed their ministries to work out modalities for containerization of cargo, allowing all tradeable items by land route at Wagah and liberalization of business visa regime.

“For a robust economic relation to develop, businessmen of both sides need to visit each other’s country. (There is) need for further liberalisation of visa regime,” said Sharma.Both sides agreed to convene the meetings of the technical working groups of customs, railways, banking, standards organizations and energy to devise the modalities for effective implementation of all requisite measures.

To increase trade opportunities, industry chamber FICCI and the Trade Development Authority of Pakistan will hold an “India Show” in Lahore in mid-February.A joint Vintage Car Rally between Amritsar and Lahore will also be held coinciding with the Show.

The Joint Business Forum will hold its third meeting in Pakistan by mid-February, 2014.

India and Pakistan are examining the possibility of expanding the list of items traded through the Wagah border, Pakistan's commerce minister Khurram Dastagir Khan said.

The neighbours officially restarted their trade normalisation talks on Wednesday when their commerce secretaries met in New Delhi after a 16-month gap.

Khan will meet commerce and industry minister Anand Sharma on Saturday morning in New Delhi and take up the issue of non-tariff barriers such as visa issues, which Pakistan says is a big deterrent to its exports to India despite Delhi giving it the most-favoured nation status back in 1996. Pakistan had agreed to give India an MFN status by December 2012, but missed that deadline because of political considerations.

India and Pakistan had agreed to a roadmap on September 2012, which said India would bring down its sensitive list under the South Asian Free Trade Agreement to 100 tariff line from 614 by April 2013, on condition that Pakistan would give India the MFN status by December 2012.

As per the roadmap, Pakistan would remove restrictions on trade through land route, and reduce the number of items on the sensitive list in a phased manner.

Meanwhile, speaking at a meeting organised by the Federation of Indian Export Organisations, Khan said granting of quick visas to business visitors and tourists holds the key to bilateral economic development.

At another event, Khan said trade relations should not be derailed by individual events. "An unpleasant event happens and trade talks are suspended, which should not be the case. We are aiming to open up trade, and it requires a stable and predictable relationship, which doesn't exist at the moment," Khan said at a Saarc business leaders conclave organised by the FICCI.

Khan described visa restrictions and derailment of the on-going dialogue process between the two countries as "the biggest hurdles in implementation of the South Asian Free Trade Agreement".

"Except the textiles sector, Pakistan has big interest in most of the sectors in India," he said. He also laid stress on the need to diminish trade barriers. "Customs at both sides should act towards pro-trade and the message should go to them from their governments in this direction," he said. Earlier in the day, India's commerce secretary SR Rao said there was a need to enhance trade through land route, particularly between India and Pakistan.

South Asian countries have called for greater involvement of private sector players for enhancing the regional integration of SAARC and increasing trade and investments in the region.

"Movement of people should be smooth in the SAARC region. Private sector can play a major role in enhancing regional integration," Afghanistan Deputy Commerce and Industry Minister Mozammel Shinwari said here. The officials were speaking at the 5th SAARC Business Leaders Conclave at FICCI.

Sharing similar views, Murtozaa Reza Chowdhury, additional secretary in the Ministry of Commerce, Bangladesh, said the intra-SAARC (South Asian Association for Regional Cooperation) trade is very low and it needs to be enhanced.

"Participation and collaboration of private sector (of the South Asian region) is very important for integration of the region. Regional groups like ASEAN are doing well," Chowdhury said.

Nepal’s Commerce Secretary Madhav Prasad Regmi said the member nations have to work together, particularly the private sector, for sustainable growth in the SAARC region.

"Regional integration will help in dealing with issues such as poverty, illiteracy and gender inequality," Rabiya Javeri Agha, Secretary, Trade Development Authority of Pakistan, said.

India's Commerce Secretary SR Rao said there is a need to enhance trade through land route, particularly between India and Pakistan.

"India cannot prosper alone. Its prosperity is closely linked with the prosperity of its neighbours. Through enhanced trade, we can build the confidence in the region. Together we can work for mutual prosperity of our people," Rao added.

Trade between the member countries (excluding Afghanistan) stood at about $ 14.5 billion in 2010-11. Afghanistan joined the group in May 2012. SAARC members comprise Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.

A study by FICCI has pointed out that the test of SAARC now is to benefit from the process of globalisation through deeper regional integration, eventually creating a South Asian Economic Union.

According to a paper prepared for the conclave, to achieve this goal, a deliberate shift from "independence" to "inter-dependence" is needed, with identified priority areas for implementation.

Commerce and industry minister Anand Sharma on Thursday announced support to a liberalised regional visa regime for SAARC countries and doubling of the number of business visa exemption stickers to 500. He also called for activation and conclusion of the SAARC Agreement on Trade in Services (SATIS).

"We need to have a more liberalised visa regime so that more businessmen can travel through the region and also bring investments," Sharma said at the inaugural address at the SAARC Business Leaders Conclave on Thursday.

He pointed out that regional trade in the South Asian region is one of the lowest in the world at 6%, against 40% in North America and 25% in ASEAN.

SAARC is an eight-nation grouping, which includes Afghanistan, Bangladesh, Bhutan, India, Maldives, Sri Lanka, Pakistan and Nepal. The SAFTA agreement on goods came into force on January 1, 2006, which required developing countries - India, Pakistan and Sri Lanka - to bring their Customs duties down to 20% in the first phase of the two-year period ending in 2007 and to zero by 2016 in phases.

The services pact called Saarc Agreement on Trade in Services (Satis) was signed in 2012, but is yet to get functional as countries are still to submit their schedules.

Negotiations for the Agreement on Promotion and Protection of Investment are still on. "There is huge infrastructural constraint in the region, and we need to address that though greater land and air connectivity and creating port linkages. We need to have freight corridors which will be able to bring down transit cost," Sharma said.

Union commerce ministers of the SAARC countries shared the stage on the occasion of the two-day SAARC economic summit and business leaders conclave in New Delhi on Thursday. Union commerce minister Anand Sharma was also present on the occasion. Speaking on the occasion, he emphasised towards regional integration in SAARC and assured India’s commitment to its neighbours in the economic growth and development. The summit, which is being organised by SAARC & FICCI in collaboration with ministry of commerce, will be addressed by Foreign Secretary of India Sujatha Singh, commerce secretary SR Rao and High Commissioners of SAARC countries. Over 500 delegates are attending the event.

Pakistan may seek implementation of a liberalized visa regime with India and close ties between banks from the two countries in return for allowing greater access to its market for Indian products when Pakistan trade minister Khurram Dastgir Khan meets India’s trade minister Anand Sharma on Saturday.

The current visa regime and the absence of a banking relationship are the biggest non-tariff barriers for trade, said Khan, who is in India for the South Asian Association for Regional Cooperation (Saarc) business leaders conclave .

“The truth is the greatest non-tariff barrier has nothing to do with trade at all, which is the visa regime,” he said at a conference organized by the Confederation of Indian Industry. “Because of this, businessmen of one country cannot travel to the other country and are unable to assess first hand the economic opportunities that exist in the other country. So it is not only about cutting the tariff lines but also about facilitating the banking relationship between the two countries.”

On whether more goods could be allowed to be traded through the land route between the two countries, Khan said: “We will see how the next round of negotiations go.”

A joint statement is expected after the meeting between the two ministers on Saturday, a commerce ministry official said, on condition of anonymity.

Stepping up the pressure on Pakistan in the wake of the killing of two Indian soldiers in Kashmir by Pakistani troopers in November, India put on hold the implementation of a liberalized visa pact as Prime Minister Manmohan Singh warned that it could not be “business as usual” with the neighbouring country.

The visa pact signed in September was aimed at strengthening business links and people-to-people ties, and was one of the concrete outcomes of a peace process relaunched in February 2011 following the 2008 terror attack on Mumbai. Trade was seen as the main driver of the renewed process—which India was given to understand had the Pakistan army’s backing—with both sides announcing many steps to boost commerce.

Khan said both countries should try to provide greater market access to each other while keeping in mind their sensitivities. India provided the most-favoured nation (MFN) status to Pakistan in 1996; Pakistan only recently migrated to a ‘negative list’ comprising items that are prohibited from being imported from India; it earlier had in place a ‘positive list’ of 1,946 items that could be imported from India. Pakistan missed a December 2012 deadline to provide MFN status to India.

As the MFN nomenclature is controversial in the local language in Pakistan, it has now decided to name it non-discriminatory market access, which would mean abolition of the negative list of trade except for a few sensitive items. Khan said Pakistan was working towards giving non-discriminatory market access to India, “which will happen in not too distant future.”

Later, inaugurating the Saarc business leaders conference organized by the Federation of Indian Chambers of Commerce and Industry, trade minister Sharma announced Indian government’s support for a liberalized regional visa regime and more than doubling the number of business visa exemption stickers from the current 200 to 500.

Commerce and Industry Minister Anand Sharma today announced India’s support to a liberalised regional visa regime and more than doubling of the number of business visa exemption stickers from the current level of 200 to 500.

Inaugurating the 5th SAARC business leaders conference here, Sharma emphasised the need for activating and concluding the SAARC Agreement on Trade in Services as growth in manufacturing will necessarily give rise to a greater demand for services. "We need to learn from the positive spin-offs that have come from regional economic agreements such as NAFTA and the economic integration that is demonstrated by the European Union."

Sharma called for the establishment of linkages among the financial institutions of the SAARC nations and said, "We support the industry's demand for opening of Indian banks in each SAARC country to support businesses and act as a catalyst to greater economic engagement.”

Ahmed Saleem, secretary-general, SAARC, said while cooperation in diverse areas has grown significantly over the years, it was up to the potential as most goods in South Asia are still procured from outside the SAARC region.

He announced that the SAARC nations were close to finalising an intra-SAARC investment agreement and that substantive progress had been made under the SAFTA agreement. Member nations were close to reducing the sensitive list of import items.

FICCI president Sidharth Birla said the real test for SAARC will be to benefit from globalisation and deeper regional integration, eventually creating a South Asian Economic Union.

Pakistan High Commissioner Salam Bashir, on Friday, called on Commerce and Industry Minister Anand Sharma and discussed enhancement of trade and economic co-operation between the two countries. Mr. Bashir is believed to have assured Mr. Sharma that the new government in Pakistan, headed by Prime Minister Nawaz Sharif, was keen on strengthening trade and economic relations with India, and a decision on various issues would be taken in the next few months.

Earlier, a joint delegation of the Federation of Indian Chambers of Commerce and Industry (FICCI) and the SAARC Chamber called on Mr. Bashir at the Pakistan High Commission. The delegation included FICCI Secretary-General A. Didar Singh, Vice-President Jyotsna Suri, and President of SAARC Chamber of Commerce and Industry Vikramjit Singh Sahney.

The delegation said the installation of a new government would provide a positive momentum in the betterment of relations between the two countries.Both sides discussed various bilateral issues.

The Pakistan High Commissioner expressed hope that the business community of the two countries would have productive interaction during upcoming meetings.

Terming the signing of the new liberal visa regime by India and Pakistan as a historic moment, the SAARC Chamber of Commerce and Industry (SAARCCCI) has welcomed this new initiative asserting that it would promote trust, goodwill, people to people contact and barrier-free trade between the two neighbours.

In a statement issued here, SAARCCCI president Vikramjit Singh Sahney welcoming the decision said it would give a quantum leap to the trust factor and raise bilateral trade volume between two countries, which at present ($ 2.5 billion) was insignificant as compared to the potential available.

Mr. Sahney, a strong proponent of peace and trade between India and Pakistan, said he had taken up this matter with the then Home Minister P. Chidambaram, Secretary General, SAARC, and the Home Secretary of Pakistan.

Time to rejoice

“This is the time to rejoice for all citizens of India and Pakistan, for businessmen and tourists, young and old alike. Inking of a liberalised visa regime that has broken barriers of 38-year-old norms of restrictive visas has appeased both the countries that had long since been separated by politics. Their people had been longing to meet their relatives, friends and re-visit their memories before it is too late,” he said.

Mr. Sahney stated that it was an earnest request on behalf of the people of both the countries, especially bonafide businessmen, senior citizens and young children, beckoning both the governments to remove the irritants in issuance of visas to them to do meaningful business, visit the land of the birth of their families for prosperity, solace and fulfilment.

Granting group visas to tourists and pilgrims through the tour operators, visas on arrival for several categories such as senior citizens, young children and a few other categories, increasing the number of days and cities of visit and longer duration -- all this is a treat and commencement of a new era of cooperation between both the governments, he remarked.

The Federation of Indian Chamber of Commerce and Industry (FICCI) hailed the liberalised visa agreement between Indian and Pakistan as a big step towards normalisation of bilateral relations which were given a new thrust during the past one year.

In a statement here, FICCI president R.V. Kanoria said the new agreement that separates business visa from visitor’s visa would allow business persons from both countries to travel seamlessly across more cities and for a longer duration. This would help boost trade and business activities and give a fillip to the economies of the two countries.

The signing of liberalised visa agreement has been hailed as a ‘historic landmark’ by the industry body FICCI.

“The signing today of a liberalised visa agreement between India and Pakistan is a historic landmark in the normalisation of bilateral relations which has been given a new thrust during the past one year,” FICCI President R V Kanoria said.

The new agreement that separates business visa from visitor’s visa would allow business persons from both the countries to travel across more cities and for a longer duration, he added.

“The agreement comes at a time when business persons on both sides are working together to make it easier to enhance bilateral trade so that the two biggest economies of South Asia are firmly on the road to deepening their economic relations,” Kanoria said.

The much-awaited, liberalised visa agreement introduces for the first time group tourist and pilgrim visas, separate visa for businessmen and visa on arrival for those over 65 years of age.

The new pact, signed between External Affairs Minister S M Krishna and Pakistan Interior Minister Rehman Malik, replaces a 38-year-old restrictive visa agreement and will pave the way for time-bound visa approval and greater people to people contacts and boost trade.

Ruling out relaxation of the mandatory sourcing norm for global retailers who want to set up stores in India, the government on Tuesday said companies have to procure 30% of their merchandise requirement from domestic small industries.

"We are not talking of any dilution. We are talking of clarity...We are very clear that 30% of the sourcing has to be from India, primarily from micro, small and medium enterprises," commerce and industry minister Anand Sharma told reporters here on the sidelines of a FICCI function. The minister's statement assumes significance as Swedish furniture retailer IKEA, which has proposed to invest Rs 10,500 crore in single-brand retail stores in India, had sought tweaking of certain clauses related to the 30% mandatory sourcing norms.

Sharma, however, said that the government would issue some guidelines about 100% foreign direct investment (FDI) in single-brand retail. "Policy is meant to attract investments. As long as the sourcing is from India, I am not going to get into any quarrel over technicalities," he said.

The minister said that major retailers in single brand are already sourcing from India.

Swedish home furnishing major IKEA sources products worth a billion euros from India and mainly from handloom and carpet clusters, he said.

According to the present single-brand FDI policy, global retailers would have to source 30% of their requirement from Indian small industries that have a total investment in plant and machinery not exceeding $1 million. agencies

In an effort that could give a boost to Indian exports to Pakistan, the latter may soon allow more goods to be imported through the Wagah border. It now allows only 137 items to be imported from India through the land route out of around 6,000 tradable items.

This is part of the agenda of the forthcoming commerce secretary-level talks between the two countries expected to be held in mid-September in Islamabad after the foreign ministers of both sides meet from 7-9 September, said a commerce ministry official speaking on condition of anonymity.

The official said the Indian side had learnt informally that Pakistan’s commerce ministry has taken the proposal to its cabinet for approval. “We are even hoping that they will do it even before the commerce secretary-level talks,” he said.

India expects Pakistan to substantially increase the list of tradable items through the land route, the official said. “We are urging them to make it the same as the Indian one, where there are no restrictions. We expect it to be at least what the current infrastructure can handle.”

The official further said that the Pakistan side had agreed to free up trade through the land route much earlier.

Trade has been expanding rapidly through Wagah even though only a small number of items are allowed to be traded through the land route, said Nisha Taneja, a professor at the Indian Council for Research on International Economic Relations.

“Allowing more items to be traded through the land route will lead to some trade shifting from the Attari rail route to the Wagah land route,” she said.

Asked whether any progress has been made on the proposal of linking the two capitals of the neighbouring countries by air, the official said the commerce ministry was waiting for a response from Pakistan. “If they agree on it, we will take a representative from the aviation ministry in our delegation,” he said.

At an interaction with the visiting Pakistani parliamentary delegation, organized by lobby group Federation of Indian Chambers of Commerce and Industry, Indian trade minister Anand Sharma said both countries will sign three agreements to facilitate trade during the commerce secretary-level talks. These include an agreement for customs cooperation, trade redressal, and mutual recognition and certification.

The commerce ministry official cited earlier said the finance ministry was trying to get cabinet approval on the three issues before the commerce secretary leaves for Islamabad.

“The mutual recognition agreement will help them (the Pakistani business community) to become more aware of procedures. An institutional mechanism will be built under which if the Pakistan exporter has any issue, it will be heard by a particular committee on the Indian side,” he said.

Earlier this month, India’s cabinet reduced the South Asian Free Trade Area (Safta) sensitive list for Pakistan by 30% to 614 items. The list of the reduced items includes 155 agricultural items, 106 textile items and three petroleum products, including aviation turbine fuel. India is expected to reduce peak tariff rates to 5% within three years as per the agreed Safta process of tariff liberalization.

Meanwhile, foreign minister S.M. Krishna, speaking about his forthcoming visit to Pakistan said he was going there this time with “greater optimism” given the progress made in the past year since official-level talks were resumed last February.

“India is of the view that normalization of ties with Pakistan should be a step by step process. My visit to Pakistan is one more step in that direction,” he said, adding that it would not be “fair to prejudge the outcome”.

Krishna’s visit to Pakistan from 7-9 September will be his second—the first being in July 2010. Besides talks with his Pakistani counterpart Hina Rabbani Khar on 8 September, Krishna will also be going to Pakistan’s cultural capital Lahore before returning home on 9 September.

India and Pakistan will soon sign three agreements – on customs co-operation, trade grievances redressal and mutual recognition, Commerce and Industry Minister Anand Sharma said on Tuesday.

“It (signing of the agreements) is a matter of weeks, maximum. There have been delays in visits. There have been changes in the Pakistan Administration. The Commerce Secretaries should have met three months ago. I am told that after the visit of the Indian External Affairs Minister to Pakistan, the Commerce Secretaries of India and Pakistan will meet in Islamabad. This will be another opportunity to take more steps,” he said while addressing a luncheon meeting organised for a visiting delegation of Members of Parliament from Pakistan.

The meeting was organised by the Federation of Indian Chambers of Commerce and Industry (FICCI).

Sharma felt that the recent decision of the Indian Government to reduce the sensitive list by 30 per cent under the South Asia Free Trade Agreement would benefit Pakistan. He said that the decision covered all sectors that were important to Pakistan.

India and Pakistan need to encourage trade by the land route, which currently was very small, he added.

The Minister said that India had proposed opening of the land route for trade along the Sialkot-Hussenewala border in Punjab and the Munabao-Khokharapar rail route.

It is also proposed that both countries would meet soon to work out a strategy on connectivity by linking each other’s Capitals by air. At present, Mumbai is linked with Karachi and Delhi with Lahore.

Sharma also mentioned that banks from both countries were also planning to open branches in each other’s lands.

Conceding that problems do exist, Sharma said that while he was not trying to simplify anything, it was imperative that irrespective of the issues there must be “maturity, wisdom and will” to overcome challenges that come in the way of building a durable partnership between India and Pakistan.

Hoping that the forthcoming visit of External Affairs Minister S.M. Krishna would lead to a liberal visa regime agreement, Commerce and Industry Minister, Anand Sharma, on Tuesday, said India and Pakistan would soon ink three agreements in the areas of customs co-operation, mutual recognition of standards and redressal of trade issues to give a fillip to economic activity.

Addressing a Pakistani Parliamentary delegation at FICCI’s first India-Pakistan Parliamentary Dialogue, Mr. Sharma said India was ready to grant multi-entry and multi-city visas to businessmen from Pakistan. “I am only hoping that the agreement is signed soon. Mr. Krishna is visiting Pakistan this week-end, and, hopefully, something will happen,” he remarked.

Mr. Sharma said there was a need to also open up more land routes to allow more people-to-people exchange and smooth entry and exit of business community from both nations. “The agreements will be signed soon. It is a matter of weeks, maximum,” he added.

“We will soon be coming out with detailed clarification and guidelines on granting permission to Indian business houses and individuals to invest in Pakistan. There were some doubts, whether the Indian industry is allowed to invest or not. The answer is yes. It is just a procedural formality. I have been informed that it is getting addressed. It is a just a matter of days. So, both ways investment flow will start,” he said. India recently allowed Pakistan nationals and companies to invest in India through the semi-automatic approval route. Bilateral trade between India and Pakistan stood at $2.7 billion in 2010-11.

Haider Abbas Rizvi, a member of Pakistan National Assembly, said that increase in trade and investment would help both sides to resolve other matters. “Our relationship should not become hostage to any issue or incident. Our dialogue process should be irrevocable. We have to ensure this in the future,” Mr. Rizvi.

Pakistani traders in the sectors ranging from textiles, marble and dry fruits will show-case their products in the six-day fair, starting tomorrow, in Mumbai. The `Made in Pakistan Expo 2012' is organised by Federation of Pakistan Chambers of Commerce and Industry (FPCCI) with the support of industry body FICCI. The expo would have a well-diversified display of the finest textiles, marble, herbs and medicines, plastics and the Pakistani variety of dry fruits products, FICCI said in a statement.

India has notified its decision to allow Foreign Direct Investment from Pakistan, much to the pleasure of Indian industrialists.

On the other hand, the Indian industry has hailed implementation of the decision, stating Islamabad should reciprocate by granting New Delhi the Most Favoured Nation (MFN) status.

“It is a great decision. Now Pakistan should also implement the MFN status for India,” FICCI Secretary General Rajiv Kumar said.

The Indian government decision to allow FDI from Pakistan was notified by the Reserve Bank the other day. However, reports were issued to the media on Friday. “It has now been decided that a person who is a citizen of Pakistan or an entity incorporated in Pakistan may, with the prior approval of the Foreign Investment Promotion Board, purchase shares and convertible debentures of an Indian company under FDI Scheme, subject to the terms and conditions specified,” the RBI notification said.

However, FDI in the strategic sectors like defence, space and atomic energy would remain prohibited, RBI said.

Assocham, Secretary General of DS Rawat also welcomed the decision. “It would lead to enhancement of bilateral economic engagement,” he said, adding the mutual trade has remained negligible, which should pick up. The bilateral trade is $2.7 billion.
Indian industry said Pakistani businessmen can explore sectors like cement, textiles and sports for investments in the country.

With India permitting investment from Pakistan, Indian industry expects Islamabad to grant the much delayed MFN status to New Delhi. This would mean that exports from India would be treated by Pakistan at part with its other trading partners.

However, Pakistan has liberalised its trade regime with India in March when it shifted from positive list rules to negative—meaning barring 1,209 items, it allows import of all other Indian goods.

Industry on Thursday hailed implementation of the decision to permit foreign direct investment from Pakistan, stating Islamabad should reciprocate by granting New Delhi the Most Favoured Nation (MFN) status.

"It is a great decision. Now Pakistan should also implement the MFN status for India," FICCI Secretary General Rajiv Kumar said.

The government decision to allow FDI from Pakistan was notified by the Reserve Bank on Wednesday.

"It has now been decided that a person who is a citizen of Pakistan or an entity incorporated in Pakistan may, with the prior approval of the Foreign Investment Promotion Board, purchase shares and convertible debentures of an Indian company under FDI Scheme, subject to the terms and conditions specified," the RBI notification said.

However, FDI in the strategic sectors like defence, space and atomic energy would remain prohibited, RBI said.

Assocham Secretary General D S Rawat also welcomed the decision.

"It would lead to enhancement of bilateral economic engagement," he said, adding the mutual trade has remained negligible, which should pick up," he said.

The bilateral trade is USD 2.7 billion. Indian industry said Pakistani businessmen can explore sectors like cement, textiles and sports for investments in the country.

With India permitting investment from Pakistan, Indian industry expects Islamabad to grant the much delayed MFN status to New Delhi. This would mean that exports from India would be treated by Pakistan at part with its other trading partners.

India had granted the MFN status to Pakistan way back in 1996.
However, Pakistan has liberalised its trade regime with India in March when it shifted from positive list rules to negative - meaning barring 1,209 items, it allows import of all other Indian goods.

Industry on Thursday hailed implementation of the decision to permit foreign direct investment from Pakistan, stating Islamabad should reciprocate by granting New Delhi the Most Favoured Nation (MFN) status.

"It is a great decision...Now Pakistan should also implement the MFN status for India," FICCI Secretary General Rajiv Kumar said.

The government decision to allow FDI from Pakistan was notified by the Reserve Bank yesterday.

"It has now been decided that...A person who is a citizen of Pakistan or an entity incorporated in Pakistan may, with the prior approval of the Foreign Investment Promotion Board, purchase shares and convertible debentures of an Indian company under FDI Scheme, subject to the terms and conditions specified...," the RBI notification said.

However, FDI in the strategic sectors like defence, space and atomic energy would remain prohibited, RBI said.

Assocham Secretary General D S Rawat also welcomed the decision.

"It would lead to enhancement of bilateral economic engagement," he said, adding the mutual trade has remained negligible, which should pick up," he said. The bilateral trade is USD 2.7 billion.

Indian industry said Pakistani businessmen can explore sectors like cement, textiles and sports for investments in the country.

With India permitting investment from Pakistan, Indian industry expects Islamabad to grant the much delayed MFN status to New Delhi. This would mean that exports from India would be treated by Pakistan at part with its other trading partners.

India had granted the MFN status to Pakistan way back in 1996.

However, Pakistan has liberalised its trade regime with India in March when it shifted from positive list rules to negative -- meaning barring 1,209 items, it allows import of all other Indian goods.

In order to strengthen bilateral economic relations, India has allowed foreign direct investment from Pakistan, Commerce and Industry Minister Anand Sharma said today.

Emphasising the need to increase economic engagement with the neighbouring countries, Sharma said: "We have allowed Indian investments in Pakistan and Pakistan's investment, whatever is the amount, to come to India".

He said that without engaging with Pakistan, South Asian economic integration would not be possible.

"We are clear that without engaging with Pakistan, South Asia Free Trade Agreement (SAFTA) cannot move forward," he said at a FICCI function.

The minister said that in the last one year, trade ties between India and Pakistan have move forward. To allow investments from Pakistan, the Department of Industrial Policy and Promotion (DIPP) had sent a proposal to Finance Ministry for changes in Foreign Exchange Management Act (FEMA) to allow FDI from Pakistan.

Sources said that in order to address the security concerns over investments from Pakistan, FDI proposals from the neighbouring country can be routed through the Foreign Investment Promotion Board (FIPB) which is headed by Economic Affairs Secretary in the Finance Ministry.

As per the present FDI policy, a non-resident entity, other than a citizen of Pakistan or an entity incorporated in there, can invest in India. The government had earlier allowed investments from Bangladesh under the FIPB route. Further, Sharma said that Chinese businessmen are also interested in investing in India.

"We will be encouraging and welcoming Chinese investments," he added.

In its bid to strengthen bilateral economic relations and enhance engagement with neighbours, India has allowed foreign direct investment from Pakistan, the Union commerce and industry minister, Mr Anand Sharma, said here today.

Emphasising the need to increase economic engagement with the neighbouring countries, Mr Sharma said: “We have allowed Indian investments in Pakistan and Pakistan’s investment, whatever is the amount, to come to India.” He said without engaging with Pakistan, South Asian economic integration would not be possible. “We are clear that without engaging with Pakistan, South Asia Free Trade Agreement (Safta) cannot move forward,” he said at a FICCI function.

The minister said that in the last year, trade ties between India and Pakistan have moved forward. To allow investments from Pakistan, the Department of Industrial Policy and Promotion (DIPP) had sent a proposal to the finance ministry for changes in Foreign Exchange Management Act (FEMA) to allow FDI from Pakistan.

Informed sources explained that in order to address the security concerns over investments from Pakistan, FDI proposals from the neighbouring country can be routed through the Foreign Investment Promotion Board (FIPB) which is headed by the economic affairs secretary in the finance ministry.

As per the present FDI policy, a non-resident entity, other than a citizen of Pakistan or an entity incorporated there, can invest in India.

With the political tensions rising in Pakistan, Prime Minister Yousuf Raza Gilani's Cabinet on Tuesday deferred a decision on moving ahead with the negative list of goods to pave the way for granting India most-favoured nation (MFN) trade status.

Pakistan commerce minister Makhdoom Amin Fahim had indicated on Monday that the February deadline for the negative list was not likely to be met but it would come through soon.

However, with the Cabinet not even taking up the matter at its meeting, it is clear that the MFN issue has been shelved for now.

Gilani has been chargesheeted for contempt of court under the direction of the Supreme Court for not taking up money laundering issues with the Swiss government.

With radical elements in Pakistan opposed to the trade treaty with India, Gilani does not appear to be in a position to push through the decision.

Federation of Indian Chambers of Commerce and Industry (FICCI) president R. V. Kanoria said: "The decision does not reflect the sentiments of businessmen on both sides, who are keen to engage with each other. But the political will is equally important."

Confederation of Indian Industries (CII) president B. Muthuraman said: "I am disappointed. But I still hope it (MFN) will happen."

Pakistan currently allows exports from India of only 1,938 goods, which figure on the positive list. However, India has already extended MFN status to Pakistan and does not impose similar restrictions on exports to or imports from the country.

Islamabad had announced in November that it had granted "in-principle" MFN status to India. The first step for implementing the decision entails replacing the positive list with a much smaller negative list.

Addressing a meeting of Pakistan and Indian business chambers at Karachi on Tuesday, Commerce Minister Anand Sharma said, "I will be discussing the negative list and MFN issue with the Pakistan commerce minister at Islamabad tomorrow (Wednesday) and we are hopeful of a positive outcome." Pakistan has to accord MFN status to India because of its obligations under the World Trade Organization (WTO) protocol.

Sharma said India and Pakistan have to move to a liberal trade regime under a small negative list.

He said India was ready to allow multiple-entry visas to a list of businessmen compiled by two leading chambers of commerce from Pakistan, if Islamabad extends the same treatment to a list of Indian businessmen prepared by CII and FICCI.

Even as Commerce Minister Anand Sharma asked Islamabad to expedite the process of granting the Most-Favoured Nation (MFN) status to India, the Pakistan Cabinet today postponed a decision on preparing a negative list of items for trade with India.

A press statement issued by the Press Information Department (PID) of Pakistan said the Cabinet considered and directed the Commerce Ministry to consult all stakeholders before the preparation and finalisation of the negative and positive lists for trade with India.

The postponement of the decision is being seen here largely in the context of current troubles of Prime Minister Yousuf Raza Gilani, who is battling the contempt of court charges in the Supreme Court. Pakistani observers say Gilani does not want to add to his government’s troubles at this stage by making any move on ties with India which could have domestic implications.

The Cabinet’s decision came as a big disappointment to the Indian business delegation travelling to Pakistan with the Commerce Minister. Both FICCI president RV Kanoria and CII president B Muthuraman said they were disappointed that the Pakistan Cabinet could not finalise the negative list. The decision was not reflective of the opinion of the business communities in the two countries, which desired promotion of trade and economic relations, they added. Pakistan maintains a positive list of more than 1,900 items, which are allowed to be imported from India.

It has to move to a negative list that would ultimately lead to the granting of MFN status to India. New Delhi had accorded this status to Pakistan in 1996.

Trade between India and Pakistan increased from $144 million in 2001 to $2.7 billion in 2010-11 while the informal trade between the two countries is estimated to be to the tune of $10 billion.

The Pakistani Cabinet, however, approved the signing of agreements for cooperation and mutual assistance in customs matters, bilateral cooperation on mutual recognition between the Pakistan Standard and the Quality Control Authority (PSQCA) and the Bureau of Indian Standards (BIS) and on redressal of trade grievances between the two countries. The agreements are likely to be signed tomorrow in Islamabad.

On the second day of his visit to Pakistan, the Indian Commerce Minister addressed a luncheon meeting hosted by the Karachi Chamber of Commerce and Industry. Pakistan, he said, was bound to grant the MFN status to India under the WTO regime, regardless of the difficulties it might face. He was hopeful that Pakistan would be ready with the negative list soon.

“Let’s open a new chapter…let’s draw a road map for economic cooperation. It has happened in all regions despite conflicts and wars,’’ Sharma said. He said it has been a case of “missed opportunities” between India and Pakistan for decades.

Karachi Pakistan on Tuesday deferred a decision on liberalizing trade with India, dashing India Inc's hopes of exporting cars, medicines, textiles and machinery to that country anytime soon.

Pakistan's cabinet put off a decision on switching to a negative list regime for trade with India after reservations from sections of the government and local industry. "The decision was put on hold as all stakeholders were not on board," Information Minister Firdous Ashiq Awan told a news conference.

Islamabad had promised to ease trade with New Delhi and it was expected to announce a roadmap for introducing the negative list during with Commerce Minister Anand Sharma's current visit.

Since enough homework had not been done on the proposal, Prime Minister Yousuf Raza Gilani has decided to defer the matter, she said.

However, Pakistan's cabinet approved the signing of three agreements for addressing non-tariff barriers with India: cooperation and mutual assistance in customs matters; bilateral cooperation on mutual recognition between the Pakistan Standard and Quality Control Authority and the Bureau of Indian Standards; and redressal of trade grievances.

India, however, is ready to sign just the customs cooperation agreement as the two are yet to be approved by the Union cabinet.

An Indian official told ET: "We understand that it is a politically difficult time for the country and are hopeful that the clearance will come as soon as the government feels comfortable. We, however, want the negative list to be smaller." The official was referring to indictment of Gilani for contempt of court by the Supreme Court of Pakistan.

According to sources, though the negative list being considered has only 638 items, it includes all items of interest to India such as auto and auto parts, pharmaceuticals, minerals and textiles, which will continue to be banned. Pakistan, at present, allows import of just 1963 items from India included in a positive list.

Indian industry members accompanying Sharma said they were disappointed but hoped that things may improve. Tata steel vice chairman and CII president B Muthuraman said, "I will still say it is a step ahead. At least people on either side have started talking about the negative list."

FICCI president R V Kanoria said the deferment of the issue did not reflect the sentiment of the business community. "There is an overwhelming feeling among both sides that trade should be normalized. But it will be possible only when there is political will," said Kanoria.

Indicating a delay in giving a further boost to trade ties between India and Pakistan, Islamabad on Tuesday said the promised shift to the more expansive system of negative list can be announced only after more consultations.

"The Cabinet considered and directed the ministry of commerce to consult all stakeholders before the preparation and finalisation of negative and positive lists for trade with India," said a statement posted on the press information department of Pakistan, the equivalent of India’s PIB.

The move comes as a big disappointment to the Indian delegation, which is currently visiting Pakistan, as the new regime could could have led to lesser restrictions, thus giving an impetus to bilateral trade.

It’s understood that the latest move could lead to a further delay in the grant of the most-favoured nation (MFN) status to India.

It also comes as a retraction of the earlier promise made by the Pakistan government in November that it will announce a negative list in February and grant the MFN status to India before 2012-end.

Pakistan's High Commissioner to India Shahid Malik said the decision was just a matter of time and "will soon be taken".

"The ongoing political developments may delay a decision, but it will eventually happen," added Malik.

Reacting to the Pakistan cabinet's decision, FICCI president RV Kanoria and CII president B Muthuraman expressed disappointment. However, they maintained that this wouldn’t hurt the goodwill between the business communities of the two nations.

Islamabad has agreed to consider the signing of cooperation in customs-related matters and mutual recognition of the Pakistan Standard and Quality Control Authority (PSQCA) and Bureau of Indian Standards (BIS).

An agreement on redressal of trade grievances is also on the cards.

Trade between the two nations stands at $2.7 billion, mainly in favour of India. It is expected to reach $10 billion. India's commerce minister Anand Sharma said the day is not far when multiple visa entry will be a reality.

Last minute glitches seem to have delayed Pakistan's transition to a negative list approach, a move which would have allowed all items other than those on the list to be freely exported from India to Pakistan, leaving India Inc disappointed.

Pakistan's Cabinet deferred the matter because all the stakeholders were not on board, Ms Firdous Ashiq Awan, Federal Minister for Information and Broadcasting, said adding that the interior and textile ministries had certain issues.

According to an official statement issued by the Pakistan Press Information Department, “The Cabinet considered and directed the Ministry of Commerce to consult all stakeholders before the preparation and finalisation of negative and positive lists for trade with India.”

However, the Cabinet approved the signing of cooperation and mutual assistance in customs matters agreement, bilateral cooperation agreement on mutual recognition between Pakistan Standard and Quality Control Authority (PSQCA) and Bureau of Indian Standards (BIS) – which would help the cement industry – and agreement on redressal of trade grievances between Pakistan and India.

The three memorandums of understanding are expected to be signed during the bilateral meeting between the Commerce Ministers of India and Pakistan in Islamabad on Wednesday.

According to reports in the Pakistan media, the cabinet was to consider a proposal to allow the commerce ministry of Pakistan to replace the positive list of 1,963 with a negative list of 636, for imports from India.

The negative list will be phased out in three instalments on a quarterly basis with quarters ending on June 30, September 30 and December 31, 2012.

The sectors on the list included food and agriculture, minerals; chemical; pharmaceutical; plastics; rubber; paper and wood; textile and clothing; ceramics; iron and steel; and auto.

Last year, Pakistan's Cabinet had given a mandate to its Commerce Ministry for complete normalisation of trade with India.

The FICCI President, Mr R.V. Kanoria, said, “I don't think the sentiments of the business community are being correctly understood…while the businesses are thinking of partnerships, but politically, they are not acting…”

Asked if he will take up the issue with the political authorities at the bilateral meetings in Islamabad, he said, “We will convey this to the political leadership of Pakistan.”

The CII President, Mr B. Muthuraman, said, that though the industry is disappointed, he was hopeful it will come through. “At least we have started a conversation,” he said.

Pakistan’s cabinet today put in deep freeze a proposal by its commerce minister, Makhdoom Amin Fahim, that would have operationalised the Most Favoured Nation (MFN) status to India announced last November.

The cabinet, which met today, directed the commerce ministry “to consult all stakeholders before the preparation and finalisation of negative and positive lists for trade with India”, said a press statement issued by the information department.

The decision means Pakistan will continue with the existing regime of restricting imports from India to just 1,963 items.

“This is not the best of times to push ambitious decisions,” said a Pakistani government official on condition of anonymity, referring to the ongoing political turmoil in the country.

The Pakistani supreme court on Monday indicted Prime Minister Yousuf Raza Gilani for not writing to the Swiss authorities to reopen graft cases against President Asif Ali Zardari. This led opposition leaders like Nawaz Sharif and Imran Khan to demand that Gilani must resign. The PPP’s coalition partners, however, reposed full faith in the prime minister’s leadership at today’s cabinet meeting.

The militant Defa-e-Pakistan Council, led by Lashkar-e-Toiba founder Hafiz Saeed and comprising hardline anti-India groups, have opposed MFN status for India. At a massive rally in Karachi on Sunday, Saeed declared, “India will not be a favoured nation. We will not let Pakistan become a market for India.”

Pakistan’s commerce ministry had proposed a small negative list of only 636 tariff lines, which too, it had said, must be phased out over the next three quarters ending December 31, 2012. The ministry had decided on the list after a six- to eight-month-long discussion with Pakistan’s domestic industry.

Moving from a positive list to a negative list would have led to a sharp increase in bilateral trade, which was a minuscule $ 2.7 billion in 2010-11. This trade was overwhelmingly in India’s favour, which exported $ 2.33 billion worth merchandise to Pakistan that year. Shifting to a negative list — the first step towards giving India MFN status — would have opened Pakistan’s doors to larger exports from its neighbour.

India granted MFN status to Pakistan in 1996. But Pakistan’s export base has remained small, said government officials in New Delhi. The Indian government and India Inc have long expected reciprocity from Pakistan, which they believe would trigger Indian investment in Pakistan in the medium term.

“It’s sad,” FICCI president R V Kanoria said of the decision by the Pakistani cabinet. “I don’t think the sentiments of the business community are being correctly understood by politicians. We will convey this to the leadership of Pakistan,” he said.

B Muthuraman, CII president and Tata Steel vice-chairman, said, “It is disappointing. While businesses on both sides are keen to forge better ties, there is still mistrust on the political front.”

The two countries will sign three pacts on Wednesday -- an agreement on cooperation and mutual assistance in customs matters, a bilateral cooperation agreement on mutual recognition between Pakistan Standard and Quality Control Authority (PSQCA) and Bureau of Indian Standards (BIS), and an agreement on redressal of trade grievances. The three agreements will address complaints by Pakistani business that India’s non-tariff barriers have disincentivised exports from Pakistan.

Pakistani business has been complaining that India does not implement the MFN status in spirit. “The resolution of NTBs is important. Trade itself is so small (exports from Pakistan), everything looks like an NTB,” Kanoria said.

In Pakistan’s corporate corridors, there is a story doing rounds – of a mouse and a lioness. The mouse fell in love with the lioness, but was afraid to open up his mind for obvious reasons. He went to gym and went on a protein diet, to enhance his physique and appearance, but of no use. Finally, the mouse mustered enough courage and proposed to the lioness. She grew in red. “Look at yourself, what do you have?” she retorted, still furious. The mouse replied: “I have the will and the confidence.”

The bilateral trade being opened up between India and Pakistan is not as bizarre and unnatural as the mouse-lioness affair, but Pakistan is looking inferior, and voices from the not-so-open detractors do not go unnoticed.

Fears of opening up trade with India may hold up the decision of Pakistan to come up with a negative list. At present Pakistan allows trade on the basis of a limited positive list. “We do not want Pakistan to become a dumping ground for the Indian goods under the garb of Most Favoured Nation (MNF) mechanism,” says a businessman from Karachi, adding that it should be a win-win for both countries.

Last year, India exported goods worth $2.33 billion to Pakistan while its imports from Pakistan were a mere $332 million. What most local businessmen want is a balance of trade – and not a trade that is heavily tilted in favour of India. “When we opened the floodgates for Chinese imports, without any restrictions, Pakistan suffered a big blow. Now when the doors finally open for India, it will be another blow,” Zia Khaleeli, head of a Karachi-based trading company Omega, told Financial Chronicle. “If we can live with China, we can live with India too,” he adds with a chuckle.

While addressing the businessmen in Karachi, Anand Sharma, India’s commerce and industry minister, gave the instance of trade between India and China.

“The trade is heavily tilted in favour of China. But that doesn’t mean that India should create trade barriers for China.”

The opposition and the fluid political situation in Islamabad has forced the Pakistan government to go slow in finalising a list of goods that it does not want to import from India (which is called a negative list of around 600 tariff lines, as against the positive list of 1,938 importable items that effectively restricted exports from India). It means another delay in granting the most-favoured nation (MFN) status to India.

“This is of course disappointing,” said RV Kanoria, president of Federation of Indian Chambers of Commerce and Industry (FICCI), at a media briefing. An India-specific negative list of 636 items, proposed by Pakistan’s commerce ministry, has not yet received a cabinet nod. At the starting of the visit to Pakistan, many were hoping that the negative list would be finalised during the visit.

B Muthuraman, president of Confederation of Indian Industries (CII) is equally disappointed. “The decision on negative list is disappointing. However, this is just one part, the more important thing is to have a change in mindset, which is happening,” Muthuraman said.

A senior official from Trade Development Authority of Pakistan told FC that some industries such as pharma and auto have raised concerns, and sought protection. “There are concerns that Pakistan may see food inflation if it allows unrestricted exports of rice and wheat to India,” she said.

Indian business houses may have to wait a little longer before they can freely export products to Pakistan. The neighbour country may take some time for transition to a negative list approach.

Speaking to media persons here on Monday, at a joint press conference with his Indian counterpart Mr Anand Sharma at the Wagah Border, Mr Makhdoom Amim Fahim, Senior Federal Minister for Commerce, Pakistan, said, “It is under process...” He declined to give any fresh deadlines.

On whether there will be a new deadline, he said, “If we set a new deadline today and tomorrow we slip, it will not be good.”

A small negative list was to be finalised and ratified by February. Thereafter, all items other than those on the negative list shall be freely exportable from India to Pakistan. In the second phase, the negative list was to be phased out. The timing of the negative list was also to be announced in February.

Though the Trade Ministers of the two countries expressed their commitments in strengthening bilateral trade, political overtones were evident. Captains of trade body FICCI, who are accompanying the Indian Minister, voiced a similar opinion that they are ready and eager to do business, if there is political will to do away with barriers.

Normalisation of trade

Pakistan's Cabinet has given a mandate to its Commerce Ministry for complete normalisation of trade with India. The move to full normalisation of trade relations is to be sequential. In the first stage, Pakistan is to switch from the current positive list approach to negative list. Currently, bilateral trade between the two countries is limited to 1,938 items. These products alone are importable from India. The rest of the items are totally banned. A large number of these items are confined to minerals, chemicals and other raw materials. Most of the manufactured finished goods, bulk drugs and pharmaceuticals, textile products and food products are banned.

As regards infrastructure and connectivity to boost ties, Mr Anand Sharma said, the construction of the integrated check post at the Wagah-Attari border will go a long way in enhancing trade ties. The Minister hoped that the construction would be ready by April . Earlier, it was expected to be completed by February.

On easy visa availability and people-to-people contact, a long standing demand of Indian Inc led by FICCI, the Pakistani Minister said, in-principal it was decided to allow benefits of multiple entry visa for the businessmen. He hoped it would be formalised soon.

Pakistan's Trade Minister Makhdoom Amin Fahim said some more ground work needed to be done and the commerce secretaries from both sides would hold extensive parleys to sort out the issues that had been hampering progress on reaching an agreement. “We will be studying in detail all the issues. I cannot give you another deadline but we will certainly make efforts to sort out the issues as soon as possible,” he said.

Mr. Fahim said that a lot of groundwork had also been done to agree on the issue of putting in place a liberal visa regime and granting multiple entry visas to businessmen. “We will be taking a decision on this matter very soon,” he added.

Stating that granting of Most Favoured Nation (MFN) to India had been taken, in principle, by the Pakistan Government, Mr. Fahim refused to set a deadline for formally issuing a notification in this regard but asserted that a lot of progress had been made in that direction. The Pakistan Trade Minister said it was the desire of Pakistan and its people that not only trade but people to people exchange should also increase in the coming times.

It is estimated officially that a pruned negative list of trade items between India and Pakistan can increase their bilateral trade to around $10 billion in the next five years. Union Commerce and Industry Minister Anand Sharma and Mr. Fahim also took part in the closing ceremony of the first ever ‘India Show' in Lahore. The show has been organised by industry body Federation of Indian Chambers of Commerce and Industry (FICCI) and the Ministry of Commerce and Industry of India and the Trade Authority of Pakitan.

The volume of bilateral trade between the two countries stood at nearly $2.718 billion last year. India can now export only 1,946 items to Pakistan from the 8,000 tradable goods between the two countries. A negative list includes items which cannot be traded legally. Once the negative list came into effect, it would also reduce the illegal border trade between the two countries. Mr. Sharma said he would like to finalise the details of a multiple entry visa regime at the earliest. “Both the governments have talked on the issue. The drafts have been exchanged. We are in favour of an early conclusion of singing of an agreement for a multiple entry visa regime to facilitate the movement of business leaders of India and Pakistan.”

When India’s commerce and industry minister met his Pakistani counterpart to talk trade, the excitement was palpable.

At the Wagah border, a half-hour drive from Amritsar, the early morning chill melted away as the bilateral warmth spread.

Anand Sharma, India’s minister, leading a historical delegation to Pakistan to continue the process that will lead to the dismantling of all trade barriers between the two neighbours, was greeted by Pakistan’s minister Amin Fahim at the border crossing on Monday, giving out signals loaded with meaning to industrialists in both countries.

While Pakistan granting India the most-favoured nation status is still a few rounds of discussions away, both ministers exuded confidence that the proposed integrated Gate 2 at Attari-Wagah would open for trade before April 30.

“We are very clear that there is an expressed wish and commitment from both governments to do what we agreed to do. During the visit, there will be new bonds of understanding to strengthen the relationship,” Sharma said at a crowded media briefing just after crossing into Pakistan. The most important issue of moving to a negative list from the positive list of 1,938 items (import policy order of Pakistan 2008) that effectively restricts exports from India still remains to be sorted out.

“The secretaries of commerce of both sides met twice and are discussing the issue,” said Fahim.

Both refused to comment on what was holding up the negotiations. The February deadline committed to by two sides is fast approaching. The Indian delegation is excited about the prospects of a big market opening up, but is peeved at the tardy process made by the two governments.

Sunil Kant Munjal, joint managing director of Hero MotoCorp, told Financial Chronicle that the delegation would help in two ways: “First, there is much effort under way to create bad sentiments…which will be removed completely. Second, opening of the markets will benefit people from both countries.” Arun Nanda, chairman of Club Mahindra Holidays, who is in the delegation, is visiting Pakistan for the first time. “I am studying Pakistan,” he told FC.

Most biggies of India Inc believe it is purely a political issue. Rajan Bharti Mittal, vice-chairman and managing director of Bharti Enterprises, says building infrastructure for roaming is not a big issue. Another half-an-hour drive from the border along a straight highway and a few crowded and dusty junctions later is the massive Lahore Expo Convention Centre, which is hosting the “India Show — Land of Limitless Opportunities,” supported by India’s commerce ministry, FICCI and India Brand Equity Foundation (IBEF).

Over 200 Indian companies trying to get a business foothold in Pakistan have opened stalls at the centre. MMTC, Essar Steel, Gitanjali, Spice Board and The Lalit are among those present. At the exhibition, a slew of small-time traders from various Pakistani cities are anxiously waiting for their government to get the Indian market opened for them.

Amin Jaffrani, who owns re-rolling mills in Karachi, said it was high time his government opened the gates for India and to. “I am looking at buying machinery from India, where they are probably available at a discount,” he said.

Dismissing the fears of Pakistani companies about Indian goods flooding their markets, the Indian minister reassured them that a lot of goods would also pass through the border in the other direction to meet India’s requirements.

The Lahore-based The Nation on Sunday reported Fahim’s call to local pharmaceutical firms to lower rates to get ready to compete with India. According to the minister, a discussion was under way on granting multiple entry visas valid for three years to Indian businessmen.The 120-member delegation will head to Karachi on Tuesday, and to Islamabad a day later, under unprecedented security cover.

Pakistan has two daunting tasks at hand: one is to nip all dissenting voices in local markets and make way for more goods from India, and the other is to keep the visiting Indian delegation safe.

When India’s commerce and industry minister met his Pakistani counterpart to talk trade, the excitement was palpable.

At the Wagah border, a half-hour drive from Amritsar, the early morning chill melted away as the bilateral warmth spread.

Anand Sharma, India’s minister, leading a historical delegation to Pakistan to continue the process that will lead to the dismantling of all trade barriers between the two neighbours, was greeted by Pakistan’s minister Amin Fahim at the border crossing on Monday, giving out signals loaded with meaning to industrialists in both countries.

While Pakistan granting India the most-favoured nation status is still a few rounds of discussions away, both ministers exuded confidence that the proposed integrated Gate 2 at AttariWagah would open for trade before April 30.

“We are very clear that there is an expressed wish and commitment from both governments to do what we agreed to do. During the visit, there will be new bonds of understanding to strengthen the relationship,” Sharma said at a crowded media briefing just after crossing into Pakistan.

The most important issue of moving to a negative list from the positive list of 1,938 items (import policy order of Pakistan 2008) that effectively restricts exports from India still remains to be sorted out.

“The secretaries of commerce of both sides met twice and are discussing the issue,” said Fahim.

Both refused to comment on what was holding up the negotiations. The February deadline committed to by two sides is fast approaching. The Indian delegation is excited about the prospects of a big market opening up, but is peeved at the tardy process made by the two governments.

Sunil Kant Munjal, joint managing director of Hero MotoCorp, told Financial Chronicle that the delegation would help in two ways: “First, there is much effort under way to create bad sentiments…which will be removed completely.

Second, opening of the markets will benefit people from both countries.” Arun Nanda, chairman of Club Mahindra Holidays, who is in the delegation, is visiting Pakistan for the first time. “I am studying Pakistan,” he told FC.

Most biggies of India Inc believe it is purely a political issue. Rajan Bharti Mittal, vice-chairman and managing director of Bharti Enterprises, says building infrastructure for roaming is not a big issue. Another half-an-hour drive from the border along a straight highway and a few crowded and dusty junctions later is the massive Lahore Expo Convention Centre, which is hosting the “India Show — Land of Limitless Opportunities,” supported by India’s commerce ministry, FICCI and India Brand Equity Foundation (IBEF).

Over 200 Indian companies trying to get a business foothold in Pakistan have opened stalls at the centre. MMTC, Essar Steel, Gitanjali, Spice Board and The Lalit are among those present. At the exhibition, a slew of small-time traders from various Pakistani cities are anxiously waiting for their government to get the Indian market opened for them.

Amin Jaffrani, who owns re-rolling mills in Karachi, said it was high time his government opened the gates for India and to. “I am looking at buying machinery from India, where they are probably available at a discount,” he said.

Dismissing the fears of Pakistani companies about Indian goods flooding their markets, the Indian minister reassured them that a lot of goods would also pass through the border in the other direction to meet India’s requirements.

The Lahore-based The Nation on Sunday reported Fahim’s call to local pharmaceutical firms to lower rates to get ready to compete with India. According to the minister, a discussion was under way on granting multiple entry visas valid for three years to Indian businessmen.The 120member delegation will head to Karachi on Tuesday, and to Islamabad a day later, under unprecedented security cover.

Pakistan has two daunting tasks at hand: one is to nip all dissenting voices in local markets and make way for more goods from India, and the other is to keep the visiting Indian delegation safe.

At a foreign exchange counter in Mumbai, I stand impatiently for converting Indian rupee into dollar. At Rs 51.40 per dollar, it is a deal, when compared to more than Rs 53 charged by more established players. The man behind the counter asked me for passport and visa, along with my air ticket. My trip is to Pakistan through Wagah boarder – something that doesn’t figure in his list since I am not flying out to a foreign destination from an Indian airport. We don’t have direct flights to Islamabad as the two countries across the border do not share an open sky policy, I tell him politely. He smiles, helplessly.

On the eve of the visit to Pakistan of a FICCI delegation accompanying commerce and industry minister Anand Sharma, hopes are soaring on either side of the border. The delegation, which is visiting Lahore, Karachi and Islamabad, beginning on Monday for close interaction with Pakistani CEOs and officials, has many leading Indian industrialists. Hopefully, the visit is going to open up a new vista for India Inc. KK Modi, Sudhir Jalan, Harsh Pati Singhania, Rajan Bharti Mittal and Naresh Goyal, apart from FICCI president RV Kanoria, are among the 80-member delegation, which also has a motley crowd of journalists. Pakistan’s political establishment, which, without any hesitation, made certain pro-India statements recently, is all set to open up bilateral trade with its financially much stronger neighbour, through the most favoured nation (MFN) status.

Both FICCI and CII have predicted the volume of bilateral trade to reach its potential of $10 billion.. FICCI says the magical figure will be achieved in the next three years, up from the $3 billion figure now.

But it is an open secret that the indirect trade between the two countries that takes place via Dubai, Singapore and other central Asian countries, amounts to $6-7 billion annually. So if the trade is channelled into direct exchanges between the countries, the trade volumes can easily soar to $10 billion in no time. Why should we wait for three years?

Pakistan has restricted the trade, maintaining a positive list of 1,938 items (vide import policy order of Pakistan 2008) – a list of importable goods from India. India, which has extended the MFN status to Pakistan, does not impose any formal restrictions on exports to or imports from Pakistan.

The opening up of markets will indeed help consumers in both countries, especially Pakistan. There will be more choices, better quality products and higher competition. This would also boost revenues into government exchequers. As FICCI suggests, there are seasonal and periodic shortages both in India and Pakistan for the same kind of agricultural items like food grains, sugar, onion and potatoes, among others, and the two countries could enter into special trading arrangements with respect to these agricultural items.

On the flip side, the opening up of markets has been a major cause of worry for several companies in Pakistan. Pakistan will undergo a similar scenario that India Inc went through in early ’90s when Narasimha Rao-led government ran out of options and opened the flood gates to foreign direct investment. A bilateral treaty on investment promotion and protection could remove the fears in Pakistan about being flooded with Indian goods.

Time has come to put aside all such apprehensions. It is for the governments to reestablish Indo-Pak trade now. Apart from Attari-Wagah border, an additional land route on the Sindh border of Monabao-Khokhara Par also needs to be opened up, to facilitate goods movement. India could take an initiative to start more shipping services between the ports on India’s west coast and Karachi. This would be nothing less than recreating history.

In a historic visit to Pakistan starting Monday, commerce, industry and textiles minister Anand Sharma said his visit would create positive environment and probably grant much-awaited most favoured nation (MFN) status to India by this year-end.

This is the first-ever visit of an Indian commerce minister to Pakistan since independence. Sharma would be a guest of Pakistan between February 13 and 16, on an invitation from his counterpart minister Makhdoom Fahim, who had visited New Delhi in September last year.

Around 120 chief executives would accompany Sharma from India who is travelling across the Wagah border by road. Both the ministers would be jointly inspecting the progress on the construction of second gate of the integrated check post at Wagah.

Pakistan is committed to shifting its trade regime with India from the positive list (PL) to negative list (NL) as per a mutually agreed road map that would allow multi-fold increase in access to Indian goods in the Pakistani market.

“We are in favour of signing of an agreement for multiple entries visa regime to facilitate in the movement of business leaders of India and Pakistan as part of a process of normalisation. We feel that this economic relationship will bring economic growth of peace, harmony, tranquility and eternity that is an essential requirement. This will positively encourage free flow of goods and exchanges,” Sharma told reporters here.

He said the bilateral trade revenue between India and Pakistan is expected to double in the next three-four years. The bilateral trade between the two countries was recorded at $ 2.7 billion in 2010-11. Trade balance is in favour of India with its exports at $ 2.3 billion and imports from Pakistan at $ 332 million.

He said his ministry and officials that are accompanying him would discuss all aspects of economic engagements hoping that by taking the economic relations to higher level. “We will be creating an environment of trust and confidence,” he said.

On the first day of his visit at Lahore, Sharma would be meeting the chief minister and governor of Punjab Province. On February14, he would be travelling to Karachi and jointly addressing the Business Conclave along with Pakistan commerce minister organised by Karachi Chamber of Commerce and Industry, CII and FICCI. He would also be meeting the chief minister and governor of Sindh.

On February 15, the minister would be leading a high level inter-ministerial delegation including commerce secretary, secretary IPP, CMD ITPO, senior officers from ministries of home affairs, external affairs, finance and heavy industries to Pakistan for bilateral talks with commerce minister Makhdoom Fahim on a whole range of trade related issues.

They would review progress of the road map for normalisation of trade relations drawn up by the two commerce secretaries in April 2011 and the subsequent ministerial meeting in New Delhi in September last year.

The ministerial dialogue would cover wide range of issues including the steps taken by Pakistan for grant of MFN status to India, progress made on strengthening of infrastructure for cargo movement on the land route, customs co-operation and mutual conformity of standards and grievance redressal.

The investment policy regime of India that currently prohibits Pakistan investments into India is also likely to come up for discussion.

Sharma would also be calling on prime minister, Sayed Yusuf Raza Gillani and president, Asif Ali Zardari. He would also be addressing the Sixth Safta Ministerial Council meeting in Islamabad on February 16.

Nearly after three decades, an Indian trade minister will visit Pakistan, for three days starting February 13, accompanied by a large business delegation, with a view to strengthening economic ties.

Commerce, industry and textiles minister Anand Sharma, along

with an 80-member strong delegation, will visit Lahore, Karachi and Islamabad to interact with Pakistani CEOs and officials.

“Amount of interest for this historic visit is huge. Large SMEs are also accompanying. Both the countries are going to gain from this visit," FICCI president R V Kanoria said.

The main objective of the three-day visit is to completely normalise trade ties between the countries.

“I have no doubt in my mind that bilateral trade which currently stands at about $3 billion can be raised to $10 billion if trade through third countries (Dubai, Singapore and Central Asian countries) is channelised into direct exchanges between the countries," Kanoria said.

Third country trade or circular trade between India and Pakistan is at present reckoned at $10 billion.

India and Pakistan’s trade with each other amounts to less than 1% of their respective global trade.

Pakistan now maintains a positive list of 1938 items which can officially importable from India. On the other hand, India has extended the Most Favored Nation (MFN) status to Pakistan and does not impose equivalent formal restrictions on exports or imports from Pakistan.

Indian industry would like the Pakistan government to adopt the negative list approach at the earliest and subsequently grant MFN status to India. From February, Pakistan would shift to the negative list of few items, which it would not import from India. By the end of 2012, it has agreed, the negative list itself should be removed.

Trade ties between India and Pakistan are expected to get a boost as New Delhi reaches out to the business community across the border, starting Monday to assure them about the positive impact of normal trade ties. Commerce minister Anand Sharma will undertake a rare journey to Pakistan, leading a large delegation of senior officials and top businessmen as the two hostile neighbours take baby steps to normalise trade and economic relations.

The private sector led by industry chambers has put up an "India show", in Lahore and Karachi - the first ever trade exhibitions from India where over 100 exhibitors are participating. Firms representing pharmaceuticals, textile, gems and jewellery, chemicals and petro-chemicals are showcasing products.

The move is a follow up to the efforts to normalise trade ties. The Pakistan government announced granting of Most Favoured Nation (MFN) status to India in November last year. But, criticism from a section of industry in Pakistan has forced Islamabad to take measured steps on the issue. But, officials said they were optimistic that by the end of 2012, the transition to full MFN status would be complete.

Officials said they will launch outreach programme to assure businessmen in Pakistan that Indian goods will not swamp the Pakistan market if trade is normalised. "We will tell them that there are enough trade safeguards measures to ensure that Indian goods do not flood the Pakistani market. Let us first liberalise trade and see the impact," said a senior government official.

Pakistan allows exports to India but has a positive list of 1,938 items which are officially allowed to be imported from India. Latest data shows that formal trade between India and Pakistan rose to $2.7 billion in 2010-11 from $144 million in 2001, while informal trade including third country trade is estimated at $10 billion, according to a FICCI status paper. "I have no doubt in my mind that bilateral trade, which currently stands at $3 billion, can be raised to $10 billion if trade through third countries (Dubai, Singapore and Central Asian countries) is channelised into direct exchange between the two countries," said R V Kanoria, president, FICCI.

The government has undertaken a series of measures to increase bilateral trade. There is a move to open a second gate at the Attari-Wagah border, which is expected to increase the number of trucks crossing the border to 500-600 daily from 150-200 at present. Pakistan has agreed to remove restrictions on the number of commodities traded by the land route once the infrastructure in Wagah is ready, while both countries have agreed to avoid arbitrary stoppage of goods at ports. Suggestions have been made for opening up of an additional land route at Monabao-Khokhara Par on the Sindh border for faster movement of goods.

"We are taking significant steps to improve the border infrastructure. India has invested nearly Rs 150 crore to develop infrastructure at the Integrated Check post near Attari," said a senior government official. He said the visa regime for business travel is also expected to be liberalised soon with multiple entry visas for 10 Indian cities, along with exemptions for police reporting. The formal announcement is expected to be made soon. Talks to expand trade in petroleum products are progressing, while efforts are also on to start negotiations for trade in electricity between the two nuclear-armed neighbours. Both sides have agreed on grid-connectivity between Amritsar and Lahore, which would pave the way for trade of up to 500 MW of power.

Trade experts said they were optimistic about the latest moves and said the effort will go a long way in helping faster regional integration. "The positive spin off for normalisation of trade is enormous. Pakistan has given signals and India now needs to take the initiative. Normalisation of bilateral trade relations will help in putting much of the political bickering on the backburner," said Biswajit Dhar, director-general at Research and Information System for Developing Countries, an economic and trade thinktank. Experts said there was huge potential for forging joint ventures between Indian and Pakistani companies in sectors such as information technology, fish-processing, drugs and pharmaceuticals, agro chemicals, chemicals, automobile ancillary and light engineering.

Commerce minister Anand Sharma will start his three-day visit to Pakistan on Monday accompanied by over 80 chief executive officers (CEOs) of Indian companies to boost trade between the countries.

Sharma will be the first Indian commerce minister to cross the border into Pakistan after a gap of nearly 30 years.

The business delegation will visit Lahore, Karachi and Islamabad to interact with Pakistani CEOs and officials.

Federation of Indian Chambers of Commerce and Industry (FICCI) president R.V. Kanoria said that apart from big companies, there is huge interest by small and medium enterprises in doing business with Pakistan. The main objective of the three-day visit is to completely normalise trade ties between the countries.

"I have no doubt that bilateral trade, which currently stands at about $ 3 billion, can increase to $10 billion, if trade through third countries (Dubai, Singapore and Central Asian countries) is channelised into direct exchanges," he said.

The Indian industry is hopeful that the Pakistan government will do away the existing positive list of 1,938 items and replace it with a negative list of limited items during the forthcoming four-day visit of union commerce and industry minister, Anand Sharma to Pakistan beginning February 13.

"Indian industry is quite confident that the Pakistan government would adopt the negative list approach at the earliest and subsequently grant MFN status to India," said R V Kanoria, president, FICCI, on Friday.

Kanoria said he is hopeful that an appropriate investment and trade policy will be worked out soon to promote investments by the businessmen of the two nations. Presently, there are no investments that have been made by the companies on either side.

Kanoria said many Indian companies in sectors such as pharma, information technology, automobile ancilliaries, chemicals and plastics are keen to make investments in Pakistan provided there exists a proper investment and trade promotion agreement between the two nations.

Kanoria said that FICCI has been suggesting a bilateral treaty on investment promotion and protection. This should remove the apprehension in Pakistan about being flooded with Indian goods and directly add value to their GDP enhancing the level of their industrialisation.

He said the delegation will visit Lahore, Karachi and Islamabad for close interaction with Pakistani CEOs and officials, in what is being described as a "a landmark initiative" for removing the irritants to two-way trade so that the volume of bilateral trade reaches its potential of $10 billion in the next three years.

India Inc, while pushing for minimal trade restrictions between India and Pakistan, has set a bilateral trade target of $10 billion by 2015.

Ahead of the Commerce Minister, Mr Anand Sharma's visit to Pakistan from February 13-15, industry says this would be substantially higher than the $2.7 billion realised in 2010-11.

Chamber delegations are accompanying Mr Sharma to Pakistan.

The FICCI President, Mr R.V. Kanoria, said, “I have no doubt in my mind that bilateral trade can be raised to $10 billion if trade through third countries (Dubai, Singapore and Central Asian countries) is channelised into direct exchanges between the two countries.”

Third country trade or circular trade between India and Pakistan is currently estimated at $10 billion.

CII has suggested full liberalisation of trade by placing items on a ‘negative' list rather than having only a ‘positive' list.

At present only 1,946 items are in Pakistan's positive list. Also, there are no joint ventures between the two countries.

Visa rules

Barriers to investment are particularly high due to restrictive visa regimes.

“It is necessary for both Governments to work on easing visa regulations for businessmen.

This means multiple entry long-term visas with no city specific visa, no police reporting which causes harassment for businessmen and discourages them,” CII said in a statement.

FICCI has been suggesting the opening up of additional land route at Sindh border of Monabao-Khokhara Par in addition to the opening up of second gate at Attari-Wagah border.

HPCL-Mittal Energy Ltd (HMEL), a joint venture between Hindustan Petroleum Corporation Ltd and Mittal Energy Investments Pte Ltd, Singapore, is already in talks for selling petroleum products in Pakistan from the Bhatinda refinery.

Given the increase in imports from India and the decision of the Pakistan Cabinet in November to grant the Most Favoured Nation (MFN) status to India, a dedicated cross-border trade gate is being opened at the Wagah border to encourage bilateral trade between India and Pakistan. The MFN status is expected to remove discriminatory higher pricing and duty tariffs that stand as barriers to exports between the south Asian neighbours.

A formal announcement of this trade gate — actually initiated earlier but put on hold after the terror attacks in Mumbai — is now planned to be made on February 13 during the three-day visit of commerce minister Anand Sharma to Pakistan.

Discussions between the two sides are aimed at doubling the annual trade between India and Pakistan to $6 billion in the next three years, government sources said. A formal announcement formalising Pakistan’s decision to accord a MFN status to India may also be made when the Indian delegation led by Sharma hold talks in Islamabad.

The delegation includes industrialists Naresh Goel (Jet Airways), Rajan Mittal (Bharti Enterprises), Harsh Pati Singhania (JK group), Omkar Singh (Apollo Tyres) among others.

The decision to ease trade barriers could open immense opportunities for the two countries in sectors such as pharma, agriculture, textiles besides petroleum products.

The first of its kind trade show by India — that will also exhibit items currently not on the positive list of items allowed for trade with India — is also being held at Lahore from February 11 to 13.

The Federation of Indian Chambers of Commerce & Industry jointly with the commerce ministry in partnership with the Trade Development Authority of Pakistan and other counterpart chambers is organising “The India Show” at Lahore.

“The primary objective of this show is to create opportunities for expansion of trade, investment and technology transfer,” said a FICCI official.

Despite the mounting tension in Pakistan due to the Government-military standoff, Islamabad has informed New Delhi that the bilateral official and business talks as well as exhibitions slated for next month are still on as scheduled.

Officials here, however, are keeping a close eye on the developments and are expected to take stock of the situation along with India Inc next week.

“As of now the Pakistan Government has not called it off. They told us that the scheduled dates remain as it is. Therefore, the programme is ‘on' till we get a written communication (from Pakistan) to the contrary,” official sources told Business Line.

Much is at stake. During February 11-13, there is the ‘India Show', an exhibition of Indian products (of over 100 stalls), organised with the help of the Indian industry body FICCI and another by the Federation of Indian Export Organisations – at Lahore, Karachi and Islamabad.

This is apart from the business-to-business networking and Chief Executive Officers Forum talks where around 100 CEOs are likely to participate. The main sectors represented are gems and jewellery, leather, textiles, auto components, agriculture machinery and medical tourism.

Then, there are bilateral level meetings led by the respective Commerce Ministers slated for February 13-16. The issues include trade in petroleum and power, easing of business visa procedures, improving border infrastructure, import of Bt cotton seeds from India and bilateral investment. Ms Ambika Sharma, Deputy Secretary General, FICCI, said, “The visit was conceptualised to actualise the intent behind the recent bilateral initiatives and goodwill gestures.”

Meanwhile, on the proposal of opening bank branches in each other's countries, India has suggested January 20 or January 30 as the date for talks between the Central Banks of both countries. However, sources said, Pakistan is yet to respond.

As part of full normalisation of bilateral trade ties, Pakistan was to transition from the current Positive List approach to a Negative List.

“A small Negative List shall be finalised and ratified by February 2012 (by Pakistan). Thereafter, all items other than those on the Negative List shall be freely exportable from India to Pakistan,” the November 2011 joint statement had said.

But latest reports from Islamabad say the process of Pakistan ratifying the small Negative List and officially granting India the Most Favoured Nation status is not likely to be completed till October 2012.

On the ‘non-tariff barriers' perceived by the Pakistan side regarding their exports to India (including cement, food items, textiles and surgical instruments), New Delhi has asked them to send a detailed note on the issues so that a discussion can be organised with a panel of regulators.

The other issue is the operationalisation of the Rs 150-crore Integrated Check Post at the Wagah-Attari border by February-end.

A bilateral meeting is scheduled on January 23 to look into the delay due to the differences regarding the site for the second gate, construction of roads and fencing. There is also a cost over-run of Rs 20-30 crore due to the delay, the sources added.

The Commerce, Industry and Textiles Minister, Mr Anand Sharma, has said India will meet its commitment of reducing tariff lines by 20 per cent under the sensitive list by next month for all South Asian Association for Regional Cooperation (SAARC) member countries. Sensitive list comprise items that are not subject to tariff reduction. This will fulfil a critical requirement of the South Asian Free Trade Area (SAFTA) agreement signed by SAARC member countries, an official statement said. “Time has come to take a call on reduction of barriers to trade.

SAFTA is moving forward on the path of economic integration and India should give full support so that the region realises it full potential” Mr Sharma said on Thursday at the South Asia Forum meeting organised by FICCI and the External Affairs Ministry. The Minister also informed that India has been bringing down the peak tariffs under SAFTA for imports from Pakistan. According to the Minutes of the recent India–Pakistan Joint Working Group meeting, the peak tariff rates would be 8 per cent by January 1, 2012 and again by 5 per cent by January 1, 2013. Pakistan assured that they will also work internally towards meeting its SAFTA obligation to India. India has already allowed zero duty access for the SAARC Least Developed Countries, for almost 97 per cent of the tariff lines.

Union Commerce and Industry Minister Anand Sharma on Thursday said that India would meet its commitment of reducing tariff lines under sensitive list by 20 per cent for all by next month under the South Asian Free Trade Area (SAFTA) agreement signed by South Asian Association for Regional Cooperation (SAARC) member countries.

“The time has come to take a call on reduction of barriers to trade. SAFTA is moving forward on the path of economic integration and India should give full support so that the region realises its full potential,” Mr. Sharma said on the occasion of the first meeting of the South Asia Forum here. The Federation of Indian Chambers of Commerce and Industry (FICCI) in partnership with the Ministry of External Affairs (MEA) is hosting the meeting.

He said India had been bringing down the peak tariffs under SAFTA in a transparent manner for imports from Pakistan and the peak rates would be 8 per cent. As per the minutes of the meeting of India-Pakistan Joint Working Group on Economic Commercial Cooperation and Trade Promotion held on August 23-24 in New Delhi the peak tariff rates would be 8 per cent by January1, 2012 and 5 per cent by January 1, 2013.

The Pakistani side has assured India that they would also work internally towards meeting its SAFTA obligation. India has already allowed zero duty access for the SAARC least developed countries (LDCs), for almost 97 per cent of the total tariff lines. “India is keen to engage more with Pakistan and develop deeper economic linkages. That will give more depth and width to our relationship,” he said.

India's trade with SAARC stands at a mere $13 billion at a time when our global trade has expanded to cross $600 billion. Indian companies have stepped out and were engaged in foreign shores investing over $100 billion and more than 90 per cent of this investment has been outside South Asia. India investment flows into SAARC have been around $10 billion. “This clearly brings out the imperative of creating a more conducive investment climate a more harmonious linkage between our industry bodies and a strong political commitment for an integrated SouthAsia,” Mr. Sharma said.

The Forum is driven by focussed discussions and active sharing of experiences and best practices among South Asia's diverse public and private stakeholders, for charting out the future course of SAARC and recommend if required, necessary improvements in the existing mechanisms.