ISLAMABAD - Pakistan and India will resume trade talks in 2016 after a gap of 20 months.

“We hope that foreign secretaries of Pakistan and India will schedule the meeting regarding economic and commercial cooperation in mid of January,” said an official of the Ministry of Commerce, wishing not to be named. He further said that both countries would decide whether to start negotiations from where they were left in March 2014 or to settle fresh issues for negotiations.

Both countries had not held any trade negotiations since March 2014 when an understanding was approached on the future trade mechanism based upon the agreement reached in 2012. However, the recent visit of Indian Prime Minister Narenda Modi and External Affairs Minister Sushma Swaraj to Pakistan could pave way for resuming trade talks between Isamabad and New Delhi.

Trade between two countries is continuing through Karachi, Wagha and the Line of Control routes despite strain in the relationship between Pakistan and India. Trade volume between the two countries is around $2.5 billion.

In previous trade talks, India was continuously demanding for Most Favoured Nation (MFN) status from Pakistan. India granted the MFN status to Pakistan in 1996 but Pakistan is yet to reciprocate because of a lack of consensus among different stakeholders. Although Pakistan was close to granting NDMA status to India in December 2012 and March 2014 by eliminating negative list containing 1,209 items, but had not given it to India due to concerns of the stakeholders.

India currently could import everything from Pakistan, except 1,209 items, placed on the negative list by Islamabad.

The agriculture sector of Pakistan had opposed to give MFN/NDMA status to India, as it would have affected the farmers. The PML-N government after coming into power in June 2013 had changed the name of Most-Favoured Nation (MFN) to Non-Discriminatory Market Access (NDMA) to avoid political implications of giving India MFN status. Islamabad also has concerns about non-tariff barriers. There is also resistance by Pakistan’s automobile and pharmaceutical sectors.

Meanwhile, India wants access to Afghanistan through Pakistan. “Pakistan could not allow Indian trucks via the Wagah-Attari border crossing due to the security reasons”, said the official. Even, Afghanistan also demanded allowing it throughway to New Delhi via the Wagah border, which was refused by Islamabad during tenth session of the Pakistan-Afghanistan Joint Economic Commission (JEC) held in Islamabad in November. In response, Afghanistan declined Pakistan’s request for access to the Tajikistan border.

Pakistan and India had signed three technical agreements on redressal of trade grievances, mutual recognition and customs cooperation to facilitate bilateral business mechanism and ease issues relating to certification, licensing, lab testing, etc in 2012.