India, Pakistan to set up joint business council, revive trade panel

NEW DELHI, Tuesday (AFP) India and Pakistan agreed to a long-standing industry demand to set up a joint business council and revive a defunct trade panel to strengthen ailing trade ties.

The trade ministers of India and Pakistan discussed ways to boost economic and trade ties in yet another sign the peace process between the South Asian rivals is gathering pace.

"We have agreed to set up a joint business council to facilitate interaction amongst business people, to strengthen economic ties and promote trade," Indian Trade Minister Kamal Nath told reporters after a meeting with his Pakistani counterpart Humayun Akhtar Khan.

The ministers met on the sidelines of political talks between visiting Pakistan President Pervez Musharaff and Prime Minsiter Manmohan Singh in New Delhi.

Musharraf and Singh agreed to boost road and rail links and revive a joint panel to promote trade during "very warm" talks after watching cricket together.

"It was agreed that it is in the interest of India and Pakistan to promote their economic and trade relations," Indian Foreign Secretary Shyam Saran told reporters. "There is a sense now that it is worthwhile reviving the joint commission which can then look into the trade relationship between the two countries."

Saran said the joint trade commission, which has not met since 1989, would cut bureaucratic red tape.

Bilaleral trade between India and Pakistan has risen from 161 million dollars in 2000 to 483.85 million dollars in the fiscal year ended March 31, with the balance tilted heavily in India's favor.

According to reports, India pressed Pakistan to grant most favoured nation (MFN) status to India which would allow it to export goods with low duty.

India granted Pakistan MFN status in 1995 but Islamabad has been reluctant to reciprocate, linking trade to settlement of the Kashmir dispute, which has been the cause of two of their three wars since independence in 1947.