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Pak hopes for trade boost as India lifts investment ban

Indian government's decision on Wednesday to lift a long-standing ban on Pakistani businesses setting up shop in India, has hailed as a breakthrough in efforts to boost the trade relations between the two Asian neighbours.

world Updated: Aug 04, 2012 01:52 IST

Indian government's decision on Wednesday to lift a long-standing ban on Pakistani businesses setting up shop in India, has hailed as a breakthrough in efforts to boost the trade relations between the two Asian neighbours.

A newspaper even said this move would provide a market of like-minded customers in India, to Pakistan

But of all the products that are expected to start flowing across the border, it is a Pakistani speciality known as lawn that could be the first through the gates. The lightweight cotton, a craze in its home country, is looking to a historic opening of the Indian market for a big boost in sales.

To add to this, Pakistan's only beer manufacturer has already announced a tie-up plan that will see its brew made under license in India.

The two sides are negotiating a new trade regime and deciding the items to be on a negative list that will not be tradable. India has ruled that Pakistan will not be allowed to invest in defence, space and atomic energy.

After years of tensions and three wars, the amount of trade between countries is negligible. Pakistan's political parties are in favour of normalising trade relations, both to boost the country's failing economy and for stronger business ties.

However, huge disagreements remain, including the status of Kashmir.