After a hiatus of over three years, Indo-Pak Commerce Secretary talks began in Islamabad on Wednesday during which Islamabad is expected to raise the issue of India's opposition to European Union's decision to provide duty free access to Pakistani goods.
India's offer to sell oil and electricity to Pakistan among others is also likely to be discussed at the meeting, which started at 11.30 am local time, two hours behind its original schedule.
Officials said the delay was due to the late night arrival of the Indian delegation here from Lahore.
The two-day meeting is taking place at the Serena hotel here at the foot of the Margalla Hills near the Rawal Lake, next to the Diplomatic Enclave.
The talks between Pakistan Commerce Secretary Zaffar Mehmood and his Indian counterpart Rahul Khullar will focus on trade expansion and removal of non-tariff barriers between the two countries.
Prime Minister Yousuf Raza Gilani had on Tuesday set the tone for the talks, saying his country wanted "constructive engagement" with India.
Following delegation-level talks, the two sides are expected to issue a joint statement tomorrow.
During a meeting with Mahmood and Foreign Secretary Salman Bashir, Gilani backed "constructive engagement" with India, saying Islamabad wants to forge bilateral relations that are based on "mutual interest and mutual respect".
Gilani also asked the Commerce Secretary to take on board all stakeholders for establishing "mutually beneficial trade relations with India".
Pakistan's Commerce Minister Makhdoom Amin Fahim had told the media after a meeting with Indian High Commissioner Sharat Sabharwal that the agenda for the trade talks would be open and all issues, including India's offer to sell oil and electricity, will be discussed by the secretaries.
Sources said Pakistan is expected to raise India's opposition to EU's decision to provide duty free access to Pakistani goods.
Indian officials said the talks would focus on better coordination and establishing systems that would boost bilateral trade in compliance with multi-lateral and regional obligations like the South Asian Free Trade Area pact.
"The aim will be to open up trade and move it to a firmer footing," said an official who did not want to be named.
Pakistan's concerns, including an incorrect perception that India is imposing Pakistan-specific barriers, were likely to figure in the talks, the officials said.
The average annual Pakistan-India trade volume is around USD two billion. A total of 1,946 items are being traded between the two countries.
The trade talks are part of the dialogue process that was revived by the two countries earlier this year after a gap of over three years.