Islamabad: Maintaining that trade relations with India are linked to 'political reality' and cannot be viewed in 'isolation,' Pakistan has refuted a report in the media that New Delhi has managed to isolate it on the trade front in the South Asian region by forming the BIMST-EC trade bloc.

"Pakistan has gradually liberalised trade with India and just recently 203 new items have been made importable from India. The economic relations between the two countries are definitely linked with the political reality and cannot be viewed in isolation," an official statement here said last night.

"Pakistan's trade diplomacy is very active in South Asia to retain the existing share and increase our market share in these economies," the statement said pointing to Pakistan's free trade treaty with Sri Lanka and its plans to have similar arrangement with Bangladesh and Nepal.

The statement was in reaction to a report in 'The News' on December 25 that India in retaliation to Pakistan's reluctance to implement South Asian Free Trade Area (SAFTA) has "isolated" Pakistan by forming Bangladesh, Bhutan, India, Myanmar, Sri Lanka, Thailand Economic Cooperation (BIMST-EC).

"After the flat refusal by Islamabad to New Delhi with regard to equal treatment under SAFTA, India has discreetly managed to create another regional trading bloc, BIMSTEC," the report had said.