Khar made the remarks while speaking during question hour in the National Assembly or lower house of parliament.
Trade between India and Pakistan reached $1.85 billion in 2010-11, compared to $3 billion with Sri Lanka.
The objection based on the fear that domestic industry in Pakistan would be swamped by imports from India is specious.
Gilani wants power from Punjab and fought hard to get India MFN status. Nikhil Lakshman listens in on Air India One
Gilani wants power from Punjab and fought hard to get India MFN status. Nikhil Lakshman listens in on Air India One
The remarks by Dar, a close aide of Prime Minister Nawaz Sharif, came within days of the World Bank saying in a report that Pakistan will benefit from granting Most Favoured Nation-status to India.
While India does not figure in the top 10 export destinations for Pakistani goods, it serves as a crucial channel for select goods such as leather hides and cheaper variants of fertilisers that are generally procured by importers at short notice.
Pakistan on Thursday said Most Favoured Nation status cannot be granted to India at a time when there is tension on the borders.
India granted the MFN status to Pakistan in 1996
Federation of Pakistan Chambers of Commerce and Industry President Zubair Ahmed Malik also said that the negative list should also be pruned to boost bilateral trade with India.
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