Pakistan on Wednesday granted India the status of 'most favoured nation' in a move that will pave the way for normalising trade relations between the two neighbours. India had granted Pakistan this status in the 1990s.
Countries that have accorded each other MFN status offer equal treatment in terms of tariffs and quotas in international trade. Members of the World Trade Organization (WTO) have agreed to accord MFN status to each other.
Pakistan was the only country in South Asia that had denied India this status in violation of WTO norms.
"The federal cabinet has unanimously approved India as the most favoured nation," information minister Firdous Ashiq Awan said at a news conference in Islamabad.
"We're clear that economic engagements, trade, removing the barriers to trade and facilitating land transportation would help the region," commerce minister Anand Sharma said.