India and Pakistan in effect resumed the composite dialogue that was stopped by the Mumbai 26/11 terrorist attack, with both sides hailing it as a "new chapter" in bilateral relations.
New Delhi, however, declined to describe it as a revival of the composite dialogue and Prime Minister Manmohan Singh told Pakistani premier Yousuf Raza Gilani that terrorism was a "perennial concern" that could derail the dialogue process.
Foreign secretary Ranjan Mathai said Gilani made an emotional appeal to Singh to visit Pakistan, saying this would give bilateral ties a boost and provide Singh with an opportunity to visit his ancestral home. Singh responded by saying he was looking forward to the visit.
There were other new elements — notably on the trade front and the resurrection of the joint commission that last met in 2005 after being in cold storage for 16 years.
Between the lines was an Indian acceptance that it could no longer hold the relationship hostage to Pakistan’s bringing the 26/11 perpetrators to justice and would have to be satisfied with symbolic and incremental moves by Islamabad on the terror front. This reflects an earlier Indian recognition that its 'don't talk' policy had run its course.
The real forward movement was on the trade front. Building on the momentum created by the granting of most-favoured nation status by Pakistan, India declared its intention to negotiate a preferential trade agreement with Pakistan. This was announced after the meetings of the PMs. Both expressed a hope that they would make progress on “core issues” that included terrorism and Kashmir.
Singh described Gilani as a "man of peace", a description that evoked sharp reactions in Delhi from the BJP.
As both leaders emerged after talks that included a 50-minute one-on-one at the private dining hall of a hotel here, they vowed to open a "new chapter" that placed the matrix of South Asia at the fore.
"The time has come to write a new chapter in the history of our relationship. And I am very happy that Prime Minister Gilani fully endorses this view… the next round of talks should be far more productive, far more result-oriented in bringing the two countries closer to each other than ever before," Singh said.
Gilani had earlier said, "I think the next round of the talks would be more constructive, more positive, and will open a new chapter in the history of both countries."
"The process of trade normalisation between our two countries will be pursued to its logical conclusion by conducting trade on an MFN basis at the earliest, and also that all countries in the South Asian region would move forward on meeting their obligations under SAFTA (South Asian Free Trade Area), and that we would also move towards a preferential trade agreement with Pakistan," Mathai said.