* Will free up trade on most items by February
* Business leaders optimistic, India defense chief sounds
(Adds defense minister, business sector quotes)
By Matthias Williams
NEW DELHI, Nov 15 Pakistan took further
steps toward normal trade and travel ties with India on Tuesday,
agreeing to open most commerce with its larger
neighbour by February and ease visa rules in the latest sign of
a thaw in relations between the nuclear-armed rivals.
"We have turned the corner," Pakistan's Trade Secretary
Zafar Mehmood said at a joint news conference with his Indian
counterpart in Delhi.
"We are talking of a complete normalisation roadmap."
The two countries' trade secretaries agreed Pakistan will
replace a limited list of items India can sell across the border
with a short list of items that cannot be traded, minutes of the
Lasting India-Pakistan peace is seen as vital to South Asian
stability and to smoothing a dangerous transition in Afghanistan
as NATO-led combat forces plan to withdraw from that country in
Distrust, border clashes and militant attacks have
undermined stability in the region ever since two nations were
carved out of colonial India in 1947 with the disputed region of
Kashmir at the heart of the problems.
They have fought three all out wars since independence from
the British. The border still bristles with soldiers who often
exchange fire and both sides man the world's highest
battlefield, the 6,000 meter altitude Siachen glacier.
Even so, the atmosphere between the two countries is at its
warmest in years following a flurry of high level meetings and
Pakistan's promise last month of a most-favoured-nation trade
status for India.
Indian Prime Minister Manmohan Singh and his Pakistani
counterpart Yusuf Raza Gilani promised to open a new chapter in
their fraught history after a nearly an hour-long discussion at
a resort island in the Maldives last week.
On Tuesday, India and Pakistan agreed to push for easing of
visa rules that severely restrict travel across the heavily
armed border. They will look at the feasibility of electricity
trading and will open a second road trading post by February.
Under the existing practice, both countries require
businessmen to register with police on their arrival and
regularly report to them. Visas are issued only for one city.
"This time it is different. It's not just politicians giving
statements; there's a whole roadmap chalked out with a time
frame," Amin Hashwani, president of the Pakistan-India CEOs'
Business Forum told Reuters.
The 'negative list" of items that India will initially be
restricted from trading includes the pharmaceutical and
engineering industries, S.M. Muneer, president of the
India-Pakistan chamber of commerce told Reuters.
Pakistani pharmaceutical and engineering companies are
worried they will be swamped by Indian imports.
Mehmood said the list would be drawn up within a couple of
months then gradually phased out. He said an expert panel would
decide in January on allowing the trade of oil products.
In contrast to the excitement in the business community,
India's defense minister sounded a note of caution.
"There are positive signs for a breakthrough but one should
not expect a miracle," Defence Minister A.K. Antony told
reporters at a meeting on regional security.
"We need to change our mindset if we really wish to reap the
benefits of mutual cooperation," he said.
In February, India and Pakistan resumed peace talks that
collapsed in 2008 when Pakistan-based militants attacked the
Indian city of Mumbai. Indian Prime Minister Manmohan Singh said
last week another cross-border attack would put an end to the
Buy-in from the military on both sides will be crucial to
building lasting peace, with Pakistan's security forces seen as
both more powerful and more cautious about a detente than the
country's often unstable civilian governments.
Business leader Hashwani said the army was on board this
time. "Contrary to popular belief, the Pakistan army has been
tacitly supportive of a good relationship with India," he said.
He called on the two countries' leaders to make the most of
the current goodwill between the nations.
"It is very important, as the Chinese say, to cross the
river by feeling the pebbles under both your feet," he said.
The rapprochement is "a game-changer" if it works, a senior
US official in Islamabad recently said. "It's going the right
way. And they've made more progress than many expected."
(Additional reporting by Chris Allbritton and Augustine Anthony
in Islamabad Writing by Frank Jack Daniel; Editing by Malini
Menon and Ed Lane)