ISLAMABAD: India and Pakistan agreed Thursday to set up a joint working group to enhance trade, in a further move designed to ease tensions between the nuclear-armed South Asian rivals, officials said.A joint statement released by India and Pakistan's top civil servants for commerce said they decided to undertake “new initiatives” to enable the trade of electricity and petroleum products with energy-starved Pakistan.

It was the first such meeting since the 2008 Mumbai attacks in which 10 gunmen killed 166 people, but stopped short of resulting in any concrete policy other than to meet again in New Delhi in September.

India blamed the Mumbai attacks on the Pakistan-based banned group Lashkar-e-Taiba and suspended a four-year peace process.

But acrimonious ties have started to ease since Indian Prime Minister Manmohan Singh invited his Pakistani counterpart Yousuf Raza Gilani to watch the India-Pakistan World Cup cricket semi-final in northern India last month.

According to media reports in India this week, India plans to export petrol and diesel to Pakistan to help its rival meet massive energy needs and to open up a new market for Indian refiners.

The working group will discuss a cross-border pipeline and will address the route and funding should Pakistan import electricity from across the border, Pakistani commerce secretary Zafar Mahmood told reporters.

India has granted Pakistan the status of “most favoured nation” and in the statement, Pakistan “recognised” that granting equal status to India would help to expand trade relations.

Trade between the neighbours is around $2 billion each year.

The nuclear-armed nations have fought three wars since independence from Britain in 1947, two over the disputed territory of Kashmir.

Indian commerce secretary Rahul Khullar on Wednesday called for a quick turnaround of trade talks after four previous rounds of commerce talks ground to a halt in the wake of the Mumbai attacks.

“This is a process that was interrupted and that must resume and go on. It must acquire significantly fast momentum if only to catch up for the time that we have lost,” Khullar said.