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By Staff
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Google Oneindia News

ISLAMABAD, Sep 27 (Reuters) Pakistan decided on Wednesday to allow imports of machinery, surgical items, chemicals and pharmaceuticals from India to expand economic relations between the South Asian rivals.

Trade between the neighbours has been held back by their history of enmity following their independence from Britain in 1947, but a peace process begun in 2004 has seen a thaw in relations that has coincided with India's emergence as an economic powerhouse.

While India granted a Most-Favoured Nation (MFN) status to Pakistan, Pakistan has yet to reciprocate and instead regulates trade through a list of items deemed tradeable with India.

The Economic Coordination Committee, Pakistan's top decision-making body on economic issues, on Wednesday allowed import of more than 302 ''tariff lines'' from India.

Pakistan earlier had put 1,527 tariff lines on the list, covering a total of just under 800 products.

''The decision will allow import of different items of machinery, surgical items and chemicals from India,'' Ashfaque Hasan Khan, an adviser to the prime minister, told reporters after the meeting.

The new additions to the list of permissible items will also include raw materials and metals, diesel locomotives, and textile machinery.

''The taxes and duties applicable on these items will be the same as those applicable on imports from other countries,'' said Khan.

While India's surging economy has stolen the spotlight, Pakistan's economy has also been one of the fastest growing economies in the world despite the lack of integration between the two.

The constraints on trade had irked some Pakistani industrialists, who have imported Indian-made goods, like textile machinery, from Dubai in order to beat the ban, businessmen say.

Trade between the two neighbours has grown since they launched a peace process, but remains well below $1 billion a year, and under $2 billion including a black market trade mostly routed through Dubai.

REUTERS DKS PM1911

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