Pakistan and India are hopeful that bilateral trade could more than double in two years after the Indian government decided to allow foreign direct investment from Pakistan.

Pakistan's government has pledged to grant Most Favoured Nation (MFN) status to India by the year end. And India has supported the World Trade Organization (WTO) decision to give 75 Pakistani products duty-free access to European Union (EU) markets for two years.

The two sides have constructed integrated check posts over an area of around 250 acres to handle the expected volume of trade at Wagha border.

As part of the trade normalisation process, the Lifestyle Pakistan exhibition held in the Indian capital New Delhi earlier this month attracted Indian textile buyers. And garment designers and branded retailers in Pakistan are now looking to expand in India.

Zain Aziz, of Sefam Private Limited, said the company is planning to launch its ready-to-wear collection in more than 200 stores in Delhi, Mumbai, Chandigarh and Ludhiana by 2015. And Farhan Lateef of Chen One hopes the investment terms will allow Pakistani firms to open brand outlets .

The All Pakistan Textile Mills Association (APTMA) is taking a delegation to India in two weeks' time to explore the possibilities of joint ventures with Indian counterparts.

"We have many synergies, which were not exploited due to trade barriers between the two countries," adds Mian Mansha, chairman of Pakistan'slargest Nishat Group. "We are keenly awaiting gradual removal of trade barriers between India and Pakistan.

Many retailers from Pakistan already export their products to India via Dubai and Singapore, but official bilateral trade between the two countries stood at just US$2.7bn in 2010-11. There are hopes this could rise to US$7bn in two years.