NEW DELHI, Jan 15: Pakistan is likely to grant Most Favoured Nation (MFN) status to India this year, Pakistan Senator Ilyas Ahmad Bilour, who heads the India-Pakistan Chamber of Commerce and Industry (IPCCI), said on Thursday.

Indian businessmen have long-pressed Pakistan to grant MFN status to India, which would allow them to export almost all items with low duty. Currently, Pakistan allows imports of only 610 items from India and these are subject to high tariffs, which encourages smuggling.

"I am sure that Pakistan will grant MFN status to India in 2004," the NWFP senator told a press conference in New Delhi. "I will take this issue up in the Pakistani senate. In the new atmosphere of trust between our nations and willingness to resolve the Kashmir issue much can happen ... I am hopeful Pakistan will reciprocate."

India granted Pakistan MFN status in 1995 but Islamabad has not yet reciprocated, linking trade to settlement of the Kashmir dispute. Mr Bilour said that 150 Pakistani firms would take part in a nine-day exhibition in Delhi from March 3-11.

"We are hoping the exhibition will lead to joint ventures between Indian and Pakistani firms in the industrial sector and boost trade," he said.

"We must exploit the enormous trade and tourism potential that exists between our countries. The signing of the South Asian Free Trade Agreement is a big step," he added.

According to the IPCCI, bilateral trade between India and Pakistan stands at 230 million dollars but could easily jump to three billion dollars within a year if the two neighbours open up their markets to each other.-AFP