Pakistan's government has voted in favor of a proposal granting India "most favored nation" status in a bid to boost trade between the two nuclear-armed neighbors.
The AFP news agency quoted Pakistani Information Minister Firdous Ashiq Awan as saying that the decision was "unanimously approved" by Prime Minister Yusuf Raza Gilani's cabinet.
He was quoted by the BBC as saying the decision " will bring economic benefits to us and this decision has been taken in the national interest."
Pakistan has already bestowed the designation on more than 100 countries, including China, Islamabad's closest foreign ally.
India and Pakistan have pursued a decades-old dispute over the Himalayan region of Kashmir, which has been the cause of two wars between them.
India and Pakistan this year resumed formal peace talks broken off after the 2008 Mumbai attacks in which 166 people were killed by Pakistani gunmen.
compiled from agency reports