In a clear signal of thaw in bilateral ties, Pakistan on Tuesday agreed to open its market for over 7,000 items from India in the next three months and promised to grant New Delhi crucial MFN status by 2012 end.
At the end of two-day talks between commerce secretaries of the two countries in New Delhi, Islamabad agreed to widen market access for Indian goods by moving from a Positive List (PL) to Negative List (NL) trade regime by February 2012.
It would translate into a huge opportunity for Indian businessmen who will be able to ship all but few items to a 150 million Pakistani market through land, air and sea routes.
"In the first stage, Pakistan will transition from the current PL approach to a Negative List...A small NL shall be finalised and ratified by February, 2012.
"Thereafter, all items other than those on the Negative List shall be freely exportable from India to Pakistan," a joint statement said. At present, Pakistan allows import of only 1946 Indian items, listed in the PL.
India-Pakistan which saw their relations touch new low after the Mumbai terror attack in November 2008, have been reaching out to each other in the past few months realising trade can bridge their political gaps.
"They (Commerce Secretaries) expressed hope that positive developments in the trade track would encourage similar progress in other components of the dialogue process," the statement said.
While on MFN, Pakistan Commerce Secretary Zafar Mahmood said that this was not "an award or degree", it would be granted when the two countries do away with any PL or NL.
This is expected before end of 2012, as per the timeline set by the two sides. "This would be MFN for India with least political discomfort in Pakistan," a key source said.