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India to push for MFN status at Pak summit

India will ask Pakistan at their summit next month for a pledge to grant it most favoured nation trading status as part of a push to help normalise ties between the two nations, Union Minister of State for Commerce and Industry Omar Abdullah said.

He said that apart from the two countries' bitter dispute over the Himalayan territory of Kashmir, 'the first and foremost (issue in the way of normal relations) has to be the issue of MFN'.

India granted Pakistan most favoured nation status in 1995, but Pakistan never reciprocated.

"We feel this is not the right way towards normalisation of relations," Abdullah, son of Jammu and Kashmir chief minister Farooq Abdullah, said in an interview.

"We will raise the (MFN) issue (at the summit). I hope we will receive a commitment from Pakistan," Abdullah said.

The summit between Pakistan President General Pervez Musharraf and Prime Minister Atal Bihari Vajpayee is set for July 14-16 and will discuss Kashmir and other issues.

It will be the first summit meeting in more than two years between the two nuclear-capable neighbours.

Under World Trade Organisation rules two countries can grant MFN status to each other for trade purposes.

Abdullah said he did not expect any formal trade agreement to be signed during the Pakistani leader's visit.

Address issue

He said he would be happy if the MFN issue was addressed and the two countries were able to put in place a structure for future dialogue on trade.

Successive Pakistani governments have been reluctant to grant New Delhi such status for political reasons as well as in response to fears of domestic industry that cheaper Indian imports would flood the local market.

According to industry leaders, official trade between India and Pakistan stands at $200 million annually but the unofficial figure is estimated to be at least five times that amount.

Most trade between the two takes place through a third country or via smuggling that brings no revenue to the governments of either India or Pakistan.

Abdullah said the level of trade between India and Pakistan meant that trade links were still not so vital as between other countries like the United States and China.

"It has not reached that critical mass wherein political considerations will be outweighed by trade considerations, Abdullah said. "India and Pakistan trade is still at a nascent stage."

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