The two prime ministers are likely to hold a bilateral meeting on the sidelines of the 17th summit of the South Asian Association for Regional Cooperation (Saarc), which is set to be held at Addu island in Maldives next week.

Though Pakistani prime minister added to the prevailing confusion over his government’s decision to grant the MFN status to India, New Delhi sought to play it down. Foreign Secretary Ranjan Mathai told journalists that New Delhi considered Pakistan’s gesture of allowing an Indian Army chopper to return to its base after it strayed across the Line of Control on October 23 last and its decision to grant the MFN status to India as “positive” indications from Islamabad. “These are, I would say, indications of forward movement,” said Mathai.

“The Cabinet has only given its approval in principle to move forward on the issue (of MFN to India) and permitted the Ministry of Commerce, which is actively engaged in trade talks with New Delhi, to negotiate with it trade-related issues,” Gilani purportedly told reporters in Lahore on Friday night.

“We will give it the go-ahead if the situation is favourable and in the national interest. Otherwise, proceedings on it would be withheld,” he added.

But Pakistani media quoted Gilani saying again on Saturday that his government was committed to granting the MFN status to India and would not backtrack on the decision. He made it clear that the term MFN should not be misunderstood, as it meant treating India at par with other countries in trade. He was quoted saying that India had enjoyed the MFN status from 1947 to 1965. Though India had restored the same status for Pakistan in 1995, Islamabad had not reciprocated the gesture.

Asked to clarify on the issue, Mathai said: “The actual statement by the Pakistan Cabinet is that the Ministry of Commerce has the mandate to take forward the process of normalisation of trade relations between India and Pakistan, which would culminate in the observance of the MFN principle in its true spirit.”

Pakistani Commerce Secretary Zafar Mahmood is set to visit India on November 13  to meet his counterpart Rahul Khullar for expanding bilateral trade relations.