The two commerce secretaries, who concluded their two-days meet in Islamabad on Friday, agreed to allow most goods to be traded through the Wagah-Attari land route--an issue being pushed by India.
Indian commerce secretry S R Rao and his Pakistani counterpart Munir Qureshi also signed three agreements for cooperation in customs matters, redressal of trade grievances and conforming to quality standards to remove non-tariff barriers.
Civil aviation ministry officials from both countries also discussed ways to ensure better air connectivity between the two capitals.
The fresh commitments are of significance as it would further lower trade barriers that have been already brought down considerably following a slew of measures taken by both after the ice-breaking meeting between commerce secretaries in April last year.
""It was agreed that after Pakistan has notified its removal of all restrictions on trade by Wagah-Attari land route, the Indian side would bring down its Safta sensitive list by 30% before December 31, 2012, keeping in view Pakistan's export interests. Pakistan would transition fully to MFN (non discriminatory) status for India by December 2012 as agreed earlier,"" as per the joint statement issued after Friday's talks.
Removal of restrictions on trade through land route will give a big boost to exports from India as Pakistan allows only 137 products to be brought in from the land route forcing most Indian exports to be sent through the sea route linking Mumbai with Karachi that increases costs.
""We are willing to bring down our sensitive list for Pakistan under Safta by another 30% (approximately 200 items) and include all items of interest to them like yarn and fruits as soon as it allows our goods to be exported through the land route,"" a government official told ET, adding that it has to be, of course, follwed by an extension of the MFN status by Pakistan.
""Pakistan has already made its intention of giving MFN to India clear when it dismantled its positive list in favour of negative list early this year. Now India has to show that it means business by giving us market access for products that we want,"" a Pakistani official told ET.
While Islamabad welcomed India's recent move to reduce duties on 264 items over through years by trimming its senstive list under Safta, it is keen on just a few products where the market is still restricted.
India's exports to Pakistan slipped 24.74% last fiscal to $1.53 billion, but is still more than three times higher than its import from the country at $422 million.
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