As Delhi takes gingerly steps towards resumption of the dialogue process with Islamabad, the home ministry has asked the government to streamline cross-border trade at the two points along the Line of Control (LoC).
The two countries had opened trade on Srinagar-Muzafarrabad and Poonch-Rawalakot routes in October 2008 that has seen commodities worth Rs 272.13 crore traded since then.
The move, however, was followed by the 26/11 attacks that led to suspension of dialogue.
Foreign Secretary Nirupama Rao broke the deadlock when she met her Pakistani counterpart Salman Bashir last month.
"Since the two countries have started talking, it is time for the government to take necessary steps to streamline the trade," a government official said, confirming that the Cabinet Committee on Security had agreed to Delhi raising the proposal to allow trading on four days instead of two.
For trade 21 items had been identified. This was supposed to be trade on barter system but there are intelligence reports that hawala channels were being used to make payments.
Last week, the police arrested five people when it turned out that Rs 13.85 lakh obtained from sale of goods had been distributed among terrorists linked to the Lashkar-e-Tayyeba.
Also, officials said some items on the list were vague. For instance, the list says fresh fruits but does not specify which ones. This allowed products from outside Pakistan-administered Kashmir to be traded.