Pakistan's Commerce Secretary Zafar Mahmood, accompanied by a team of officials, will hold discussions with his Indian counterpart Rahul Khullar for the next two days to resolve some of the contentious trade issues.
These include India seeking clarity on Pakistan's Cabinet decision to grant it MFN status and Pakistan seeking liberalisation of visa regime for businessmen.
Islamabad, which will have to treat India at par with other economic partners after grant of MFN status, has been complaining about the non-trade barriers for its shipments to the Indian market.
Before leaving for New Delhi on Saturday, Mahmood had said in Islamabad, "...Hopefully, you will hear good news after two days". He had also indicated a "major breakthrough" in the talks.
On arrival here, he had stated that Pakistan was not backtracking on the MFN decision.
Mahmood had said that Pakistan stood committed to normalising its trade relations with India and MFN is part of the exercise.
India-Pakistan trade is at a paltry USD 2.65 billion even as the third country trade (round tripping) is estimated at USD 10 billion.
The two neighbouring countries have intensified their efforts to improve their trade and political relations in the recent past.
During his talks with Pakistan's Prime Minister Yousuf Raza Gilani on the sidelines of the SAARC Summit at Addu in the Maldives last week, Prime Minister Manmohan Singh had offered to sign a Preferential Trade Agreement with Pakistan, committing to eliminate duties on all goods by 2016.
India has also 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. MFN status is a World Trade Organisation rule under which countries are required to give equal treatment to their trading partners.
Mixed signals emanating from Islamabad had caused confusion following announcement of the decision of the Pakistani Cabinet on granting MFN status to India.
However, Pakistan Foreign Minister Hina Rabbani Khar had clarified on the fringes of the SAARC Summit, "We will not backtrack on Cabinet decision. So let me categorically say that and I don't see a lot of room for confusion."