Pak Com Secy reaches India, MFN on top of agenda for talks

"We have to fully normalise our relationship and you cannot fully normalise the trade relationship without invoking the MFN principle...so we will be working on that," Mahmood told reporters on arrival here. Before Mahmood headed for New Delhi, Pakistan removed restrictions on import of 12 items from India, including raw material and machinery- a move seen as a goodwill gesture by Islamabad towards its neighbour.

He denied that Gilani had backtracked on the Most Favoured Nation (MFN) status issue. "No, not at all. In fact, Mr Gilani is fully behind it. He was presiding over the Cabinet when the Cabinet decided that we have to fully normalise relationship with you (India)...," he said.

Mahmood, who is scheduled to hold two-day talks with his Indian counterpart Rahul Khullar from Monday, said the two countries are taking their economic relations to a different level and are moving in the "right direction".

He said the present level of engagement has mandate from Pakistani political leadership. "...Hopefully, you will hear good news after two days", Mahmood said without elaborating. In Islamabad, he indicated a "major breakthrough" in the upcoming talks.

As a return gesture, India said it would soon introduce liberal and flexible visa policy for Pakistani businessmen. This was stated by commercial attache at the Indian High Commission, Arvind Saxena at Lahore Chamber of Commerce.

In New Delhi, Khullar said: "both of us are extremely optimistic that we will go forward with the same tempo as our last talks (in April)".

President of the Lahore Chamber of Commerce and Industry Irfan Qaiser Sheikh said that though the business community was happy with the Pakistan government's move to grant MFN status to India, it desired that all genuine reservations of various sectors should be removed through discussions.

While Pakistan's Cabinet had announced on November 2 its decision to grant India the MFN, there was confusion thereafter. However, Foreign Minister Hina Rabbani Khar and other senior Pakistani ministers have since sought to clear the air, saying Islamabad was not backtracking on the MFN decision.

The two neighbouring countries have intensified their efforts to improve their trade and political relations in the recent past. During his talks with his Pakistan's Prime Minister on the sidelines of the SAARC Summit at Addu in Maldives, Prime Minister Manmohan Singh had offered to sign a Preferential Trade Agreement with Pakistan, committing to eliminate duties on all goods by 2016.

The India-Pakistan trade is a paltry USD 2.6 billion, though the third country-routed commerce is estimated at USD 10 billion. India has been backing the European Union proposal to grant special trade concessions to Pakistan where floods caused havoc to its economy, last year.

India had granted the MFN status to Pakistan in 1996. The MFN is a World Trade Organisation rule under which countries are required to give equal treatment to their trading partners.

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