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Japan may lift sanctions on India, Pakistan

Japanese Prime Minister Yoshiro Mori is likely to announce the lifting of two-year-old economic sanctions on India and Pakistan during his visit to the nations in late August, a report said on Monday.

Business leaders and Mori's Liberal Democratic Party persuaded the government over the issue in a bid to repair relations in particular with India, which is becoming one of the world's largest markets, the Yomiuri Shimbun newspaper said.

Tokyo also feared further deterioration in the Pakistani economy could fuel activities among Islamic fundamentalists and cause political instability, the daily quoted a foreign ministry official as saying.

Japan imposed sanctions, including a freeze on new non-humanitarian grants and loans, after India and Pakistan carried out a series of nuclear tests in May 1998.

An LDP official said in late May the party would call on the government to lift the sanctions.

Previously, Tokyo had demanded India and Pakistan sign the Comprehensive Test Ban Treaty if they wanted sanctions to be removed.

According to Japanese media reports Mori will tour India, Pakistan and Bangladesh in late August.

But a foreign ministry official said no concrete decision had been made, both on the trip and the sanctions.