India and Pakistan have agreed to ease visa regime for businessmen to boost bilateral trade.

Islamabad also assured New Delhi to move to a small negative list of imports from India by the end of this month. This negative list will be phased out by the year end culminating in the most favoured nation status to India. The two countries also agreed to allow opening of two branches of their banks on reciprocal basis for which an understanding has been reached between Reserve bank of India and State Bank of Pakistan.

New Delhi and Islamabad also signed three important pacts to improve their economic ties. The two countries signed agreements on cooperation in customs, mutual recognition of standards and for redressing trade grievances in the presence of Indian Commerce, Industry and Textiles Minister Anand Sharma and Pakistani Commerce and Trade Minister Makhdoom Amin Faheem in Islamabad last evening.

Visiting Commerce and Industry Minister Anand Sharma, who is leading an over 120 people-strong business delegation, told reporters in Islamabad that he has discussed the issue of visa liberalisation with Home Minister. He said the two countries will completely revise the existing bilateral visa agreement that was signed in 1974 to facilitate travel by businessmen from both the countries.

He added that the Joint Working Group (JWG) set up by the two countries to revise a Bilateral Visa Agreement in 1974, has finalised a draft and both sides have agreed to it. On the time period for signing the final agreement, he said it will be done at the earliest.

On trade front, Pakistan is expected to grant the MFN status to India by this year-end as it is likely to phase out the negative list by then. Once the negative list is phased out, the transition to MFN status will be automatically completed. At present, Pakistan follows a positive list and permits imports of only about 1,900 items form India which gives almost full access to Pakistani goods.

In a joint statement issued by the two commerce ministers following the bilateral talks, Pakistan said that it will switch over from the restrictive positive list regime to a negative list this month, but a timeline for phasing out the negative list will be announced later. This will mean that Pakistan will soon allow imports of all goods from India except those mentioned on the negative list that expected to contain around 700 items.