New Delhi: Commerce and industry minister Kamal Nath has asked the joint study group (JSG) on economic cooperation between India and Pakistan to identify goods that are sourced by them from third countries and see if these could be sourced from each other.

Inaugurating the first meeting of the JSG here on Tuesday, Kamal Nath held that such identified goods must be removed from the negative lists. He said that both the sides must exploit the complementarities between the two economies.

"If in any case we are importing these goods from third countries, then why should we hesitate to import them from each other? Apart from anything else, the transaction cost would be much cheaper," Kamal Nath said.

He pointed out that the third country was benefiting more from the current arrangement of massive indirect trade. It was estimated that the indirect trade between India and Pakistan was more than double the direct trade. A commerce ministry official, however, said the indirect trade between the two countries would be about $2 billion.

Kamal Nath said the bilateral trade had the potential to grow five-fold within a couple of years if right flexibilities were granted. The bilateral trade in 2003-04 stood at about $340 million, with the balance of trade in India''s favour. India''s exports to Pakistan in April-September 2004 increased to $246.32 million from $69.16 million in the corresponding previous period.

The minister pointed out that bilateral trade had been showing a satisfactory increase over the past few years though there was no bilateral trade agreement between the two countries. "During the current fiscal, it has even shown robust growth," he said.

Kamal Nath highlighted the limited access to transport cargo through land routes being one of the major constraints for the rapid growth of trade between the two countries.

He also made it clear that the efforts of both the countries to enhance bilateral cooperation "would in no way detract us from our global or regional commitments, rather it would enrich both".

Speaking on the inaugural of the two-day JSG here, the Pakistan''s commerce secretary, Tasleem Noorani, said he had an "open mind" as he proceeded for the discussions at the JSG and pointed out that the trade between the two countries had "unfortunately" remained stunted and not achieved its potential. "We need to push the process further," Noorani said.