India and Pakistan are not ordained to remain permanent adversaries and they should create an atmosphere of peace to boost trade, Pakistan Prime Minister Shaukat Aziz said Wednesday.

"Pakistan-India relations are not ordained to perpetually remain adversarial. A sense of confidence in our common destiny, coupled with the courage to take bold decisions to turn the corner is required," he said at a dinner hosted by India Inc. that marked the conclusion of his two-day visit to India.

"It is time for a strategic rethink. It is time to move away from rigid mindsets...We must be realistic and pragmatic," Aziz maintained.

The Federation of Indian Chamber of Commerce and Industry (FICCI) and the Confederation of Indian Industry (CII) jointly hosted the dinner for Aziz, who was Euromoney's Finance Minister of the Year for 2001.

"Investment and major ventures could take off in a big way if both sides are able to create an enabling political environment of peace, trust and confidence,"

The Pakistan prime minister said a new beginning in economic relations could be made if the proposed Iran-India gas pipeline through Pakistan can take off. This, he added, could also boost the ongoing confidence building measures between the two countries.

Pakistan believed both countries can gain a lot by cooperating in the field of energy, Aziz said.

The visiting dignitary - who, like his Indian counterpart Manmohan Singh had nursed Pakistan's economy back to health as finance minister - also spoke about his country's economic policies and the success achieved in the past few years.

Pakistan, Aziz said, is well positioned geographically to emerge as a commercial hub for land-locked Central Asia and beyond. Pakistan is forging close cooperative links with South Asia, Central Asia and the Gulf regions.

"We have also started consultations to enter into preferential tariff and even free trade arrangements with several important economies of the Asia-Pacific region," he added.

The next ministerial meeting of the Asia Cooperation Dialogue (ACD) will be held in Islamabad next April, Aziz announced, adding Pakistan and India can together contribute to the success of the ACD enterprise.

During the meeting, representatives of Indian industry said lack of proper infrastructure to facilitate faster movement of goods and people between the two countries was a major bottleneck in expanding trade relations.

The issue of Pakistan not according most favoured nation (MFN) status to India also cropped up. A representative of an apex chamber of Pakistan defended Islamabad's decision not to go ahead with the proposal.

"The anti-dumping barriers being raised by New Delhi are counter-productive," said Sheikh Jamil Mehboob Magoon, vice president of the Federation of Pakistani Chambers of Commerce and Industry (FPCCI).

"The barriers may not be evident but they are nonetheless there," Magoon told IANS. For instance, rock salt and molasses, which are in abundance in (Pakistani) Punjab, cannot be supplied to India via the Wagah land border, he pointed out.

"Even though there is a huge demand for these products in Indian, we are being asked to supply them via steamer from Karachi, making the export unviable," he said.

Magoon maintained that such problems notwithstanding, trade diplomacy was the only route to regional prosperity and improving goodwill between Pakistan and India.

Indian exports to Pakistan have registered impressive growth in recent years, almost doubling from $144.01 million in 2001-02 to $286.94 million last fiscal.

India's imports, on the other hand, dropped from $68.21 million in 2001-02 to $44.85 million in 2002-03, but rose to $57.65 million last fiscal.

Trade through unofficial channels, however, is estimated to be several fold higher than what is indicated by the official data, both sides admit.

--Indo-Asian News Service