Pakistan's government has made a swift U-turn on plans to allow limited imports of sugar, cotton and wheat from India after a political backlash against the move. The Pakistani government's economic coordination committee said on Wednesday that import permits would be approved in a bid to rein in rampant inflation, but politicians criticised the apparent thaw in relations with India.
Pakistan Finance Minister Hammad Azhar had said the government made the decision "in the interest of the people", when asked why trade was resuming despite the Kashmir tension.
But on Thursday Interior Minister Sheikh Rashid Ahmed told reporters the decision had been "deferred" until India restored Kashmir's special status.
Islamabad suspended trade and diplomatic ties with India in 2019, when Jammu and Kashmir was made into a Union Territory.
Both countries withdrew their top diplomats, and consular staff were expelled or withdrawn.
There has been a frosty stand-off since, but signs of rapprochement recently have included Prime Minister Narendra Modi and his Pakistani counterpart Imran Khan exchanging letters, as well as a resumption of talks last week on the use of resources from their shared Indus River.
Pakistan's economy is in the doldrums, a position made worse by a third wave of the coronavirus pandemic that has seen the reintroduction of partial lockdowns across the country.
The import of half a million tons of sugar would likely have slashed prices by up to 20 percent ahead of the forthcoming fasting month of Ramadan, when consumption soars.
The economic committee had also paved the way for three million tons of wheat to be brought in, as well as unspecified quantities of cotton and yarn.
Bloomberg reported last week that the United Arab Emirates had brokered secret back-channel talks between India and Pakistan.