New Delhi: Asserting there was scope for enhancing bilateral trade between India and Pakistan to $ 1 billion annually, the Government today (Dec 13, 2004) said Islamabad has agreed to the formulation of an economic cooperation agreement between the two countries.

Replying to supplementaries during Question Hour in Rajya Sabha, Commerce and Industry Minister Kamal Nath said that this followed his meetings with Pakistan President Pervez Musharraf during his Pakistan visit on November 22-23.

Nath said that while his first meeting was part of economic ministers' meeting with the Pakistan President, the second meeting was a bilateral one that focussed on economic cooperation.

Nath said that it was agreed during the meeting that economic engagement was an important ingredient to enhance overall cooperation between the two countries.

"After that meeting, the Commerce Minister of Pakistan informed me that Islamabad was ready for a joint study group for having an economic cooperation agreement between the two countries," Nath said.

In reply to a query on unofficial trade between the two countries, Nath said that it could be between $ 300 to 400 million.

He said that Indian exports to Pakistan had risen by 328 per cent during April-July of the current fiscal and stood at $ 167.38 million.

The Minister said that there was potential to increase bilateral trade between India and Pakistan to $ 1 billion annually.