File photo of Commerce and Industry Minister Nirmala Sitharaman
With India calling off Foreign Secretary level talks with Pakistan, uncertainty now looms large over resumption of trade dialogue between the two countries.
Bilateral trade talks were suspended last year following escalation in violence along the Line of Control.
India Inc termed the development as "unfortunate" and asked both the countries to take forward the normalization process of trade relations.
"It is very unfortunate. Normalisation of trade relations between the countries must continue," Assocham Secretary General D S Rawat said.
CII Director General Chandrajit Banerjee said: "India's concern as communicated by the government are critical and are of utmost importance to us. While furthering trade is important, we must focus on the immediate concerns. Secure environment is important for fostering trade relations".
Angered by Pakistan's consultations with Kashmiri separatists, India today called off next week's talks between Foreign Secretaries, telling it bluntly to choose between an Indo-Pak dialogue or hobnobbing with the separatists.
In a dramatic setback to efforts to resume the stalled bilateral dialogue, India cancelled the talks scheduled to be held in Islamabad on August 25, raising strong objections to consultations held with separatist Hurriyat leaders by Pakistan High Commissioner Abdul Basit.
In the recently concluded meeting of India-Pakistan Joint Business Forum (IPJBF), business leaders from both the sides had discussed various ways to boost two-way commerce and investment.
As part of efforts to normalise bilateral trade relations with India, Pakistan is also scheduled to hold its second mega lifestyle exhibition-cum-cultural programme in India for four days from September 11.
Earlier this month, Commerce and Industry Minister Nirmala Sitharaman had said in a written reply to the Rajya Sabha that the commerce ministries of India and Pakistan had not yet decided on resumption of talks on bilateral trade.
Commerce Secretaries of India and Pakistan were expected to deliberate on various trade related issues after the meeting of Foreign Secretaries of the two governments.
In 2012, Pakistan had committed itself to giving the Most Favoured Nation (MFN) status to India but missed its own deadline because of domestic opposition.
Pakistan has to abolish the negative list of 1,209 tradeable items. Abolishing the list of items that cannot be imported from India means the grant of NDMA status to the country.
Major sectors included in the negative list of Pakistan are auto, steel, paper & boards, plastics, textiles, electrical machinery and pharma.
NDMA (Non-Discriminatory MARKET Access) is a nomenclature chosen by the Pakistani government to avoid political ramifications at home in giving India the MFN status.