NEW DELHI, Oct 27: Indian government approved a plan on Friday to restore direct cargo shipping links with Pakistan after a gap of 35 years, but only for ships from third countries, officials said.

The decision by Indian Cabinet is expected to substantially boost trade between the two neighbours. Previously, all ship cargo between the countries had to be routed through other ports such as Singapore and Dubai.

This is a very important decision since it will increase the volume of trade and eventually bring down shipping rates, senior minister Priya Ranjan Dasmunshi said.

In addition, ships flying Indian and Pakistani flags will be allowed to transport third-country cargo from each other’s ports, Dasmunshi said.

There was no immediate word on whether the new rules would also apply to passenger and cruise ships.

Friday’s decision follows an agreement reached between the two countries in December to allow direct transport of cargo by ships.

Annual trade between India and Pakistan reached nearly $1billion this year. But informal trade, a euphemism for cross-border smuggling, is estimated at nearly $2 billion, according to Indian industry groups.—APP