Karachi: Pakistan Tuesday deferred its decision to finalize a list of goods it does not want to import from India, an important step towards granting it the most favoured nation (MFN) status.
Once the MFN status is granted, Pakistan will have to treat India on par with its other favoured trading partners.
India unilaterally gave MFN status to Pakistan in 1996.
Business leaders who are accompanying Commerce and Industry Minister Anand Sharma on a visit to Pakistan expressed disappointment over the decision.
"This is of course disappointing," Federation of Indian Chambers of Commerce and Industry (FICCI) president R.V. Kanoria said.
Before the visit, Indian authorities and industry chambers had expressed hope that Pakistan would implement its promise of granting MFN status to India during the trip.
The Pakistani cabinet, at a meeting chaired by Prime Minister Yousuf Raza Gilani Nov 2, had decided in principle to grant MFN status to India.
The main hurdle in implementation of the decision is the finalization of negative list of goods.
Pakistan`s commerce ministry has proposed an India-specific negative list of 636 items. Pakistani Commerce Minister Makhdoom Mohammad Amin Fahim has approved the list. However, the cabinet has deferred its decision.
Confederation of Indian Industry (CII) president B. Muthuraman said the business community of both countries was disappointed over the decision.
However, Muthuraman expressed the hope that the reciprocal visits of the trade ministers and business leaders would help strengthen trade and investment relations between the neighbours.
"The decision on negative list is disappointing. However, this is just one part, the more important thing is to have a change in mindset, which is happening," Muthuraman said.
FICCI president said industry lobbies of both countries were pressing the government to implement MFN status in letter and spirit.
"Once the MFN principle is implemented, I am sure we may then find considerable reduction of informal trade which continues to exceed the formal trade figures in a big way," said Kanoria.