India and Pakistan had renegotiated and signed the new protocol on the conclusion of the third round of the Composite Dialogue on 14 December 2006. However, the bilateral protocol has not been operational so far.

The protocol is part of a bid to increase trade linkages between India and Pakistan, with the two neighbours zeroed in on a number of issues, including expansion of bilateral trade by removing non-tariff barriers (NTBs) and para tariffs, opening of two bank branches in each country, joint registration of basmati rice as GI, facilitation of cement exports from Pakistan and import of tea from India.

The two sides have at the fourth round of the Composite Dialogue earlier this week, taken up the issue of movement of cargo trucks across the Wagah border, for which the border infrastructure needs to be improved, and laying of optical fibre linkages and cooperation in IT-enabled medical facilities. The commerce secretary-level meetings also agreed to organise trade shows and increase transportation through railways.

The optical fibre linkage was at an advanced stage, Mr Shah said. "Only the final linking-up has to be done," the Pakistan commerce secretary added. This would facilitate the setting up of broadband on both sides and promote telemedicine, he elaborated.

Mr Shah announced that the first tranche of cement from Pakistan would arrive in India by year-end. Stating that this was a "win-win" proposition, he said Pakistan had surplus cement and India needed the commodity for its rapidly-growing infrastructure sector. "We have accepted third party validation. It takes around three weeks for a sample to be tested fully," Mr Shah said.

The two sides also identified irritants, mostly in the nature of technical barriers, on tariff and non-tariff barriers and customs procedures.

Mr Shah said the two sub-groups and facilitation working under the Joint Study Group (JSG) were also working out the sanitary and phyto-sanitary (SPS) measures and stringent standards which were impeding the growth of bilateral trade.

"These sub-groups are devising a road map for mutual recognition agreements between the two sides," he said, adding that the sub-group on customs was in the process of harmonising customs procedures relating to evaluation, assessment and clearance of goods.

On the sticky visa issue, Pakistan's High Commissioner to India, Mr Shahid Malik, said: "Pakistan's proposals on visa facilitation are currently being discussed and once the proposals are accepted by the Government of India, you will witness a sea change in the visa regime." At present, Pakistan offers a six-month multi-entry visa to Indian businessmen.

On the question of export guarantees, the Pakistan commerce secretary said: "We have asked India to share with us their export insurance procedures so that Pakistan can replicate them and thereby facilitate higher volumes of imports from India."