Pakistan has linked granting of the Most Favoured Nation status to India to a "sustainable political dialogue" even as the two countries agreed on Thursday to look into various proposals to enhance their economic and commercial cooperation.

Commerce secretary Dipak Chatterjee and his Pakistani counterpart Tasneem Noorani discussed prospects of economic and commercial cooperation in a "frank and cordial atmosphere" and agreed to consider them further, a joint statement issued after their two-day talks in Islamabad said.

"Wide-ranging proposals were made on various aspects of economic and commercial cooperation. This would be considered further," it said.

The MFN issue also figure prominently during the talks but Pakistan, while expressing willingness to improve bilateral trade ties, declined to grant the MFN status to India until both sides made progress in dialogue to resolve political issues.

"Pakistan is ready to consider MFN status for India along with other issues if sustainable political dialogue process starts to resolve all outstanding issues between the two countries," Pakistani Commerce Minister Humayun Akhtar told Chatterjee when he called on him on Wednesday night, the state-run APP news agency reported.

The minister made the remarks after Chatterjee suggested to him that Pakistan should grant the MFN status to India, it said.

India has already granted the MFN status to Pakistan under the SAARC framework.

During the talks India made around 50 proposals to give a major boost to the trade ties, which have not made much headway due to Pakistan's decision to firmly link improvement in trade relations to the progress on the dialogue to resolve Kashmir and other vexed issues.

Indian proposals for cooperation included areas like telecom, agriculture, civil aviation, health and information technology.

During his meeting with Chatterjee, Akhtar also emphasised that there must be a level playing field available to Pakistani businessmen so that trade might increase for the benefit of both the countries.

The completion of the talks on economic and commercial cooperation formally brought down the curtain on the official-level parleys on the eight-point composite dialogue. Other issues that have been discussed by the officials of the two countries were peace and security, Jammu and Kashmir, Wullar Barage, promotion of friendly exchanges, Siachen, Sir Creek, terrorism and drug trafficking.

The progress on talks on these issues would be reviewed by the foreign ministers of the two countries on September 5 and 6 in New Delhi and they would announce further course of action.

While the joint statement did not elaborate on trade proposals which came up for discussion, The Nation daily quoting officials said the Indian proposals included transit facilities to Pakistan to expand its trade to Bangladesh, Sri Lanka and other SAARC countries provided Pakistan gave same facilities to India for its trade with Afghanistan and Central Asian States.

However, there was no confirmation about it from the Indian side.

The paper said the two countries also discussed proposals to increase the present flight services to 14 weekly flights.

The two sides expressed desire to extend the flight services to one more city in each other's country in addition to the present two cities, it said.

Currently, Indian Airlines operates flights to Lahore and Karachi while Pakistan International Airlines flies to New Delhi and Mumbai. Pakistan wants to extend the flight to Hyderabad in India and offered IA to extend its flight to Islamabad, the paper said.

Also both sides discussed the formation of a working group and a joint trade council to address each other's apprehensions in regard to trade, it said.

India has also offered manufacturing of CNG vehicles in Pakistan and the Tata group was already in touch with a Lahore-based company in this context, the daily said. Some of the Indian companies working in the oil and gas sector expressed their interest in working in Pakistan.

The daily said that both sides also exchanged proposals regarding visits of trade delegations and cooperation in the telecommunication sector.

According to official reports here, Pakistan proposed that India should seriously consider the Iran-India gas pipeline project to be laid through Pakistan.

For sometime, Islamabad has been offering full security guarantees to both India and Iran for the multi-billion-dollar peipeline project, which if materialised could be a major boost for the Indian energy sector.

According to latest figures, India exported $300 million worth of goods to Pakistan, while Pakistan's exports stood at around $81 million this year.

Currently the two nations trade through third countries like the UAE, which according to estimates, amounted to around $2 billion.

Indian officials have predicted a trade potential of about $4 billion, if the two countries traded directly.