The decision to form the panel was made during a meeting between a visiting delegation of the Confederation of Indian Industries (CII) and members of the Lahore Chamber of Commerce and Industry.
The two industry chambers decided that the committee will try to sort out all non-tariff barriers affecting India- Pakistan trade.
The 10-member panel, comprising five members each from the two countries, will look at logistics-related issues for the smooth flow of goods between the two sides.
The committee will also try to influence the two governments for the early removal of "hurdles and hitches" impacting bilateral trade, said a statement issued after the meeting held yesterday in Lahore.
Kiran Vohra, leader of the 17-member CII delegation, and Farooq Iftikhar, president of LCCI, discussed a wide range of issues related to bilateral trade.
Vohra said Pakistani businessmen and planners should strive for better penetration of their country's goods in Indian markets.
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Problems faced by Pakistani traders in obtaining Indian visas and apprehensions of Pakistan's pharmaceutical sector and engineering industry due to the normalisation of trade relations were also discussed by the two sides.
Vohra made it clear that the trade normalisation process was a win-win situation for both countries and India and Pakistan would have to share opportunities.
The Indian private sector is ready to go to any extent to strengthen Pakistan's business community as nothing is better than having a strong neighbour, he said.
Iftikhar said frequent exchanges of trade delegations clearly indicates that private sector representatives are very eager to play their roles in promoting direct trade.
However, he said the size of the Indian economy and opening of free trade will relatively pose bigger challenges to Pakistani industry.
There are differences in the cost of doing business, duty structures and economies of scale, he said.
The best way forward is to identify areas of economic cooperation, Iftikhar said.
Joint ventures and outsourcing and sharing of technology could pave the way for trade expansion while open market competition would be highly disadvantageous to certain sectors of Pakistan like pharmaceuticals and auto industry, he added.
"The unfavourable trade balance with India is not an issue. As long as we can import from India certain raw materials, semi-finished goods and some finished goods at cheaper rates than from other countries, it goes in our favour," Iftikhar said. (MORE)