Pakistan and Indian officials in Islamabad Wednesday began two-day talks on economic and commercial cooperation as part of the scheduled composite dialogue to normalize their relations.

The talks were held between a Pakistani team led by Commerce Secretary Tasneem Noorani and a five member Indian delegation headed by Commerce Secretary Dipak Chatterjee.

"We are going to discuss all the issues presently obstructing Indo-Pak trade," Chatterjee told reporters Tuesday after he entered Pakistan via the Wagah border post, about 30 kilometers east of Lahore, capital of Punjab province.

He said that there are serious impediments to bilateral trade such as opening up of the border at Wagah, cumbersome business visa procedures, obsolete shipping agreement and up gradation of rail links.

The total yearly foreign trade of India is US$125 billion and that of Pakistan is US$30 billion, but the bilateral trade has been indirect and is estimated at US$2 billion, Chatterjee said.

India has granted the Most Favored Nation status to Pakistan and expects a reciprocal response from Islamabad, which has insisted that trade relations can only be improved when the Kashmir dispute is solved.

Pakistani and Indian officials started two-day talks on terrorism and drug trafficking Tuesday. Both sides comprehensively exchanged their views and the talks were held in a "frank and candid" atmosphere.

These talks are part of the composite dialogue process which is aimed at solving all outstanding issues including the Kashmir dispute between the two countries.

(Xinhua News Agency August 11, 2004)