In a step towards promoting people-to-people contact, Pakistan has given clearance to a ferry service linking Mumbai, Karachi and Dubai.

A license has been issued for a ferry service linking Mumbai, Karachi and Dubai, Pakistan's Federal Minister for Ports and Shipping Babar Khan Ghauri said in Islamabad on Thursday.

"The launch of the ferry service was a long-awaited demand of businessmen," Ghauri told reporters after a visit to Port Qasim.

The ferry service would give considerable boost to trade and help businessmen, particularly small traders in transporting goods, he said, adding that a shipping protocol agreement between India and Pakistan would be signed next month.

"This would induce a number of private shipping companies to operate under the Pakistani flag and would help our shipping industry grow considerably," he said. The ferry service, which existed between the 2 cities for several years after independence, was proposed by India last year.

The service was expected to be ready by the year-end when the two countries would reopen the consulates in Karachi and Mumbai to meet the rush for visas.