Pakistan and Afghanistan have agreed on a transit trade agreement which will also allow the landlocked Afghanistan to export goods to India through Pakistan's land route, Pakistan's Commerce Minister Makhdoom Amin Fahim said on Sunday.

Fahim told media persons in Islamabad that he reached the agreement with his Afghan counterpart Commerce Minister Anwar-ul- Haq Ahadi after two-day talks in Islamabad.

Afghanistan-Pakistan Transit Trade Agreement (APTTA) will replace a similar agreement signed by the two countries in mid- 1960s.

Pakistan has, however, not accepted Afghanistan's demand to allow transit facility for transportation of Indian goods via Pakistan land route to Afghanistan, the Pakistani Commerce Minister said.

He said Afghan truckers would deliver their cargoes at Wagah, an official border point between Pakistan and India. In return, Afghanistan will also provide transit facility to Pakistan to exports its goods to Central Asian states, Fahim said.

Under the new agreement, Afghan trucks would be allowed to cross the Torkham border point and deliver goods to any Pakistani city. Afghanistan has already given this facility to Pakistani truckers. Afghanistan will use all ports of Pakistan for transit trade, the agreement says.

There had been deadlock in Pakistan-Afghanistan talks over access to India to use Pakistan land route for its goods to be transported to Afghanistan. There had also been dispute over cross- border smuggling, but both sides decided to go ahead to sign the agreement and will keep on talks to resolve the two issues.

Pakistan and Afghanistan had signed a memorandum of understanding in Washington in May last year to begin talks on a transit trade agreement. The talks were hosted by the U.S. Secretary of State Hillary Clinton.

They had agreed to finalize the agreement by the end of 2009, but differences over allowing India to have trade with Afghanistan via Pakistan and smuggling delayed the agreement.

Pakistan says Afghanistan is its important trading partner and the bilateral trade has grown from 170 million U.S. dollars in 2000-01 to 1,491 million U.S. dollars in 2008-09.

Afghan Transit trade through Pakistan has increased from 161 million U.S. dollars in 2000 to 1,073 million U.S. dollars in 2009, said the minister, adding that in view of expansion of global trade,both the countries feel the need for an up-dated and improved Transit Trade Agreement which was first signed in 1965.