ISLAMABAD, May 24: The government is initiating a discussion among various ministries on the issue of enhancing trade relations with India.

A senior official told Dawn on Saturday that a preliminary meeting in this connection would be held on Monday at the foreign office to deliberate upon various proposals for discussion between the two countries.

The meeting, which would be attended by senior officials from the ministries of defence, railways, sports and culture, interior, foreign office and commerce, would also work out a negotiation agenda for a possible resumption of dialogue between the two countries.

The official said the meeting would discuss resumption of air, train, bus services and sport ties between the two countries as well as proposals for further enhancement in these areas.

The main task of the meeting would be to discuss pros and cons of possible extension of the most-favoured nation status to India and its likely implications on Pakistan’s economy.

According to a report, giving an MFN status to India would create problems for those Pakistani manufacturers who are engaged in producing goods that are also produced by their Indian counterparts.

There is a possibility that the products in which the Indian producers enjoyed an edge in quality could wipe out the Pakistani products from the local market.

The report recommended that to facilitate trade and technology exchange between the two countries especially in the agriculture field, it was necessary that more border-crossing spots were set up.

It also recommended relaxation of visa procedure for businessmen.

The report said the Indian industry would have an edge in accessing Pakistani markets because of the government support. Indian exports covered under the export promotion capital goods and technology up-gradation schemes are tax-free in India along with several export incentives available to such goods.

Local businessmen feared dumping of Indian goods in the local markets which would in turn put local industries out of business besides causing large-scale retrenchment.

The Indian manufacturing sector, which was perceived as being more advanced, enjoyed government subsidies and had the benefits of low labour wages as compared to Pakistan.

The report said that India had a highly protected and closed economy, particularly the import regime for capital goods (negative list) was still restrictive despite dismantling of quantitative restrictions.