NEW DELHI, Aug 11: India should lower tariffs and grant greater market access to Pakistani products, reciprocating moves by Islamabad to improve trade ties between the two countries, a top Pakistan government official said on Thursday.

Syed Asif Shah, the top official in Pakistan’s commerce ministry, told Reuters in an interview that granting most favoured nation (MFN) status to India was no longer an area of difference and did not figure in recent talks.

“It (MFN) is not an important issue anymore. It is an issue which is just a footnote somewhere,” Mr Shah said.

“We are offering substantial openings to Indian products and, in fact, we hope that India will give us some access on products that we want to export like bed linen, textile products and homemade products.”

Analysts say New Delhi may not be lobbying hard for MFN because it expects the implementation of a South Asian Free Trade Area by next year will remove all barriers and facilitate free movement of goods between Bangladesh, Bhutan, India, Pakistan, Sri Lanka, Maldives, Nepal and Pakistan.

Trade between India and Pakistan hit around $600 million in 2004-05, jumping nearly 67 per cent from a paltry $288 million in the previous year, thanks largely to improved ties between the nuclear rivals.

The Indian government has maintained that trade will gather pace once Islamabad grants MFN status to New Delhi, which means offering lowest tariffs to Indian exports. India granted MFN status to Pakistan more than two decades ago.

Mr Shah said Pakistan was keen on increasing trade with India and had lifted a ban on sugar imports from India and allowed imports by the land route.

“India insists always that we should expand the positive list of items which India can export to Pakistan. We have now something like 770 items from which Pakistan can import from India,” he said.

“They may not look a lot but they form 45 per cent of our tariff lines, so almost half of the products that Pakistan imports from the world can be imported from India.

Earlier this year, Pakistan agreed to import from India select vegetables and livestock that were in short supply. India agreed to import lentils, cotton, sugar and dry fruits.

But analysts say the current trade does not capture the full picture as barriers to trade still force companies into costly detours via third countries, such as Afghanistan and the United Arab Emirates.

These indirect shipments are said to have been worth around $1 billion in 2004.

The Associated Chambers of Commerce and Industry, an Indian industry lobby group, says trade could touch $10 billion within the first five years if the two sides succeed in drafting a free trade agreement.

—Reuters