ISLAMABAD, Oct 4: Pakistan has urged India to accept "national treatment" for its investors in Pakistan, rather than insisting on having Most Favoured Nation (MFN) status which cannot be offered to it under the prevailing circumstances.

Informed sources told Dawn here on Monday that Pakistan had conveyed to India that Islamabad wanted "simultaneous progress on political and economic issues" and that without addressing the Kashmir dispute, resumption of relations in all the fields might not be possible.

During a three-day meeting of the sub-committee of the Saarc Inter-Governmental Expert Group (IGEG) on Investment Arbitration and Avoidance of Double Taxation held in Katmandu, Nepal, from Sept 29 to Oct 1, the Pakistani delegation, which included two foreign office officials, maintained that while the Saarc forum needed to be strengthened, matters pertaining to political issues should not be overlooked.

In this regard, the Pakistani delegation conveyed to the Indians, both officially and unofficially, that without the resolution of political issues, including that of Kashmir, preference could not be accorded to economic issues alone.

However, sources said, Pakistan expressed its willingness to sign avoidance of double taxation agreement among the members of Saarc for which commerce secretaries of all the seven countries would meet here on Nov 20.

"After their meeting, commerce ministers are expected to meet in December and, hopefully, the agreement on double taxation will be signed during Saarc Summit in Dhaka in January 2005," a source said.

He said that Pakistan had explained to India that under the "national treatment" proposal, Indian investors and businessmen would get equal treatment vis-a-vis their Pakistani counterparts and that under the prevailing environment, this was a good option to be availed by the people sitting across the border.

One of the reasons that was also forcing Pakistani authorities not to extend MFN status to India, sources said, was the possible demand of 46 countries to also have that status with whom Pakistan had signed bilateral investment agreements.

"The officials of the ministry of commerce have been asked to go slow over the resumption of economic issues," another source said, adding that India was pushing hard to resolve all outstanding economic issues in the Saarc forum but was not agreeing on simultaneous resolution of economic and political issues.

Sources said that Pakistan has favoured resolution of investment related issues in Saarc within some regional forum which needed to be created. In this behalf, Saarc Bilateral Council will be created for the resolution of disputes.

The council will serve as a better forum rather than going to UNICITRAL of the United Nations or the Paris-based Council of Commerce for dispute resolution. "In fact, there will be a formal decision to have Saarc agreement on Protection of Investment", a source said.