India and Pakistan took a major step forward to strengthen bilateral ties by signing the much-awaited new liberalised visa agreement to boost people-to-people contacts.

The agreement was signed by External Affairs Minister S.M.Krishna and Pakistan Interior Minister Rehman Malik in Islamabad Saturday evening.

The inking of the agreement took place soon after Krishna's talks with his Pak counterpart Hina Rabbani Khar. Malik also immediately announced that Pakistan will release all Indian fishermen held in Pakistan jails on the visit of Krishna and the orders are being signed.

In their crucial talks, S M Krishna Hina Rabbani Khar reviewed the second round of resumed dialogue with issues like terrorism to be on top of the agenda. The one-to-one meeting between Krishna and Khar was followed by delegation-level talks between the two sides. Indian officials earlier said that terrorism will form the core of New Delhi's discussions, particularly the slow pace of the Mumbai attack case trial in Pakistan.

Under the new visa regime, for the first time, group tourism will be part of the new pact which will also have other new categories, including multiple city one-year visas for businessmen and visa-on-arrival for people aged 65 years at Attari/Wagha checkpost for 45 days.

This visa will be non-extendable and non-convertible. Exemption from Police reporting, longer stay, specific time limit of 30 days of application for issuing visa are the other highlights of the new Visa agreement.

Exemption is also provided children below twelve years of age and Eminent Businessmen from Police Reporting.

According to official sources, bona fide businessmen, not in EPR category, may depute their authorized representatives for reporting.

Single entry Visitor visa will be issued for a maximum period 6 months but stay not to exceed 3 months at a time and for 5 places. It is at present limited to 3 places.

People can now enter from and exit from different checkposts and change in Mode of travel will also be permitted.

Chennai has been included in place of Amritsar for checkpost purpose .

A new category has been introduced in visitor Visa. A visitor visa for a maximum five specified places may be issued for a longer period up to two years with multiple entries to Senior citizens, Spouse of a national of one country married to person of another country; and Children below 12 years of age accompanying parent or parents as given.

Business visa has now been separated from visitor’s visa to promote trade and business activities between the two countries. Businessmen with an income of 5 lakh Pakistani rupees or equivalent per annum or annual turnover or gross sale of three million Pakistani rupees or equivalent will be given one year business visa, with five places for up to four entries. .

The Category II in this segment provides for Businessmen with an income of at least five million Pakistani rupees or equivalent per annum or turnover of thirty million Pakistani rupees or equivalent per annum will be given one year multiple entry business visas for upto ten places, with exemption from Police Reporting.

Another new category has been introduced for group tourism. A Visa will be provided for not less than 10 people and not more than 50 people, valid for 30 days-organised by approved tour operators/travel agents.

The tour operator will be responsible for police reporting on behalf of the group. The Group Tourist Visa facility will also be available to students of educational institutions of both countries.

Pilgrim visa, another new provision, will be issued to Pilgrims intending to visit religious shrines as per the 1974 Protocol on Visits to Religious Shrines, or any future revision to the Protocol.

These visas will be issued for a single entry, restricted to 15 days validity and would be non-extendable.

Transit visa will now be issued for 36 hours. The duration was 72 hours earlier.