NEW DELHI: India sees progress in ties with Pakistan in spite of recent hiccups on the Line of Control in Kashmir, President Pranab Mukherjee said on Thursday.

In his address to the joint sitting of Parliament at the start of its budget session, he said: “With Pakistan, we have made progress towards normalisation of relations, strengthening mechanism for bilateral trade and facilitating greater people-to-people contact.”

Against the backdrop of the alleged beheading of an Indian soldier on the LoC, Mr. Mukherjee, however, said: “It is also important that Pakistan abides by its commitments and desists from acts that contribute to a trust deficit”.

The president prefaced his remarks by saying that India continued to seek peace, stability, cooperation and economic development in the sub-continent. “We attach the highest priority to relations with our immediate neighbours”.

He also made it clear that as Afghanistan prepared for a political and security transition in 2014 and beyond, “we will continue to help Afghanistan evolve peacefully and fight terrorism and extremism”.

On China, Mr. Mukherjee said his government intended to work with the new Chinese leadership to reinforce the positive direction of the bilateral relationship. “My government's foreign policy continues to be driven by the objectives of creating an enabling environment for our national development, ensuring the security of the nation and fulfilling our international responsibilities”, he said.

About Sri Lanka, he said: “We are making efforts in our engagement with Sri Lanka, including in our efforts to resettle and rehabilitate the internally displaced persons there and to ensure a life of peace, dignity and equality for the Tamil people.”

Hinting at a resolution of lingering disputes with Bangladesh, he said the government proposed to introduce a Constitutional Amendment Bill in Parliament to give effect to provisions of the Land Boundary Agreement with the neighbouring country and its 2011 Protocol, which will strengthen border management and the country's security.

The Strategic Partnership with the US has deepened with progress across all areas of the relationship. “We look forward to intensifying this engagement during the second term of President Obama,” Mr. Mukherjee said.