The Pakistan government has approved the start of bilateral trade with India through the Wagah-Attari road link and the development of infrastructure to facilitate commerce.
The Economic Coordination Committee of the federal cabinet allowed the commerce ministry to start bilateral trade with India through the road link during a meeting chaired by finance ministry chief Shaukat Tarin yesterday.
The decision was made in light of an agreement between President Asif Ali Zardari and Prime Minister Manmohan Singh during a meeting on the sidelines of the UN General Assembly in New York last year.
The ECC advised authorities to implement the proposal for bilateral trade though the Wagah-Attari road link in a "phased manner commensurate with parallel development of infrastructure on both sides of border", an official statement said.
The ECC also permitted the commerce ministry to increase the number of items traded between the two countries from the current figure of 1,938 in a phased manner.
The Committee directed the petroleum ministry to cut by half its demand of gas from the proposed Iran-Pakistan-India pipeline project, the Dawn newspaper quoted its sources as saying.
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Pakistan¿s share from the project is 1.05 billion cubic feet a day (bcfd), which would now be reduced to 500 million cubic feet a day because of the refusal by Iranian authorities to reduce the price of gas, the newspaper reported.
The ECC meeting was told Iran was unwilling to reduce its demanded price of gas, which is 80 per cent of the price of crude oil in the international market. Pakistan has asked for this to be brought down to 68 to 70 per cent of the crude oil price.
Trade through the road link will initially be restricted to 14 items.
Subsequently, the route will facilitate the import of essentials and raw material for export-oriented industries, media reports said.