The Pakistan government has missed a self-imposed deadline for allowing all tradable items through land routes from India because of stiff resistance from "land-owning elite" in the federal cabinet, according to a media report on Sunday.
The two countries had agreed during a meeting of their commerce secretaries in September to open the Wagah border and other land routes for trade in all commodities, including agricultural produce, by the end of October.
A joint statement issued at the time had said a proposal for removing restrictions on trade via land routes had been sent to the cabinet, which would notify its decision before the end of October.
However, the cabinet is reluctant to take up the proposal due to resistance from its members and parliamentarians, the influential Dawn newspaper reported on Sunday.
An unnamed official was quoted as saying that it appeared to be a "very difficult decision" for the government at a time when it is set to complete its tenure in the next few months.
Leaders of the ruling Pakistan Peoples Party have said the next general election will most probably be held in May.
"No one can afford to take a decision that could send a negative message to voters," the official was quoted as saying.
"The election will cause a delay in the liberalization process launched in April," the official added.
The PPP's constituency consists mostly of landowners and farmers in southern Punjab, Sindh and Khyber-Pakhtunkhwa.
The Pakistan commerce ministry submitted a proposal seeking approval of a move to allow India to export more than 5,600 items by land, especially through the Wagah border, as against the current list of only 100 items allowed to enter Pakistan by land.
The joint statement issued in September had said that "after Pakistan has notified its removal of all restrictions on trade by Wagah-Attari land route, the Indian side would bring down its SAFTA sensitive list by 30 per cent before December 2012".
Since the Pakistani cabinet had not cleared the move to increase trade through land routes, the South Asia Free Trade Agreement sensitive list has not been changed by India.
The products in the sensitive list are allowed for trade but flows are controlled through tariffs.
Trade between India and Pakistan is conducted under a negative list regime, which bars the import of 1,209 items from India.
Pakistan has said it is committed to phasing out the negative list by December 31, following which Most Favoured Nation-status is to be granted to Delhi.
Once the negative list is phased out, India would bring down its SAFTA sensitive list to 100 tariff lines at 6 digit level by April 2013.
"I don't see these commitments being honoured in the present circumstances," the Pakistani official said.
He claimed the government was not backtracking from its decision and attributed the delay to "procedural hiccups".
A unnamed commerce ministry official said the agricultural lobby is trying to sabotage the trade liberalisation process.
"We have enough safeguards to protect our major sensitive products like sugar, wheat and cotton from any cheap imports," he said.
Pakistan has nominal trade with India in some agricultural products. Fruits and vegetables are imported from India when the need arises.
The official said the concerns of feudal lords in parliament had no economic justification.
He said there was no opposition from the industrial sector to the trade liberalisation moves.