The two countries also asserted that they had no intention of entering into an arms race, saying they had plenty of problems to counter, including poverty, hunger and illiteracy. While Pakistan asserted that the ''core issue'' of Kashmir should be resolved as per the UN resolution and by involving the people of Kashmir, India asserted that contentious issues could be discussed ''in tandem'' with other subjects to avoid getting hamstrung.
External Affairs Ministeer Pranab Mukherjee and Pakistan Foreign Minister Shah Mahmood Qureshi, who held talks here on carrying forward the Composite Dialogue Process (CDP) into its fifth round, said at a joint press conference after the discussions that progress had been made on several issues and several others needed further discussions.
Both ministers asserted that the two countries were ''determined'' to resolve all outstanding issues and take the peace process forward in the larger interest of their people, the region and the international community.
The two countries also signed an agreement on Consular Access to prisoners held in each others' jails. The agreement was signed by Indian High Commissioner in Islamabad, Satyabrata Pal, and Pakistan High Commissioner in New Delhi, Shahid Malik.
Both the ministers witnessed the signing ceremony.
Declaring that Pakistan was ready for a ''grand reconciliation'', Mr Qureshi said both sides had to sit and talk and had a vision of peace and development in South Asia. ''We are ready for a grand reconciliation. But we have to sit and talk,'' he said. Mr Mukherjee said some progress had been made in Siachen, although there had not been any solution. He, however, said both countries were determined to resolve the issue.
Mr Qureshi said Pakistan had given a package (on Siachen) which could be discussed and needed due consideration.
Mr Mukherjee, while asserting that both countries had a stake in each other's development, said they had decided to ''expand the base of their economic cooperation by strengthening bilateral trade, creating a favourable environment for investment and providing a friendly atmosphere by making necessary amendments in our policies.'' With the whole world moving on the path of globalisation, the two countries were also catering to each other's needs. While India was in need of cement, Pakistan had decided to supply it and India had decided to expand railway communication and conveyor belt facilities at the border to improve transportation of goods.
''If we can create a stake in each other's economic development, it will help in resolving other problems,'' Mr Mukherjee added.
The Pakistan Foreign Minister said movement on all issues had to be made in tandem while Mr Mukherjee said movement on one issue complemented the other.
Citing the example of China, he said while the border problem remained unresolved, both New Delhi and Beijing had moved forward in other fields and had already achieved a target of 40 billion dollar trade which had been set for 2010.
Now the target had been set at 60 billion dollars by 2010, he added.