A regional trade agreement and diversification of the export basket could boost the India-Pakistan bilateral trade from the current $345 million to $10 billion by 2010, an industry study says.

"Trade between India and Pakistan is projected to reach the $10 billion mark by 2010 provided the South Asian Free Trade Agreement (SAFTA) execution is not thwarted by the two countries," the Associated Chambers of Commerce and Industry of India (ASSOCHAM) stated Tuesday.

ASSOCHAM president Mahendra K. Sanghi said that during the last five years, imports from Pakistan to India were heavily concentrated on items such as fruits and nuts, spices, leather, textile yarn, fabrics, made-up articles and wool raw.

These accounted for 71.2 percent of India's total imports from Pakistan.

Similarly, India's exports to Pakistan during the period were largely oil meals, pharmaceuticals, chemicals, chemicals, rubber manufactured products except footwear, paints, plastic and linoleum products and agro-chemicals.

These accounted for 53.7 percent of India's total exports to Pakistan.

"The study recommends extensive diversification of existing trade basket of India and Pakistan to achieve the projected $10 billion mark bilateral trade by 2010," said Sanghi.

Speaking about the bilateral trade between India and Pakistan in the SAARC region, he said: "India's trade with Pakistan increased at the CAGR (compound average growth rate) of 16.65 percent during the post-liberalisation period (1992-93 to 2002-03)."

India's exports to Pakistan are 8.3 percent of its total exports to the SAARC region, while 24.1 percent of India's imports from SAARC countries come from Pakistan.

Pakistan's exports to India account for 24.4 percent of its exports to SAARC countries while its imports from India are 64.9 percent of its total imports from SAARC countries.

India's exports to Pakistan between April to July 2004 showed a record 328 percent increase, rising to $167 million from $39 million in the corresponding period of the last fiscal.

Imports from Pakistan were estimated at $19 million as against $25 million during the same period of the previous year.

Bilateral trade between India and Pakistan during April-July 2004 has increased to $186 million as against $64 million during April-July 2003.

"The volume of informal trade is larger than formal trade. The official trade between the two nations can further flourish provided efforts are made to legalise the unofficial trade by improving trade infrastructure," ASSOCHAM said.

The efficient and cost effective transportation and communication is a pre-requisite for promotion of trade and commerce and movement of goods, services and people.