Pakistan has postponed granting the Most Favored Nation (MFN) status to India, local media reported Monday.

Pakistan had announced in October 2011 that it would grant MFN status to India from Jan. 1, 2013 by converting the negative list into positive list by the end of 2012.

Last month, the Federal Cabinet directed the Trade Ministry to immediately implement the government's decision to grant the MFN status to India and decided to phase out the negative trade list by the end of February to normalize trade relations between Pakistan and India.

However, the Pakistani government has again postponed its final decision on granting MFN status to India and left the issue for the next government. The government completes its term on March 17.

Dunya TV reported that the process of granting MFN status to India has been delayed after the adverse criticism by Pakistani industrialists, investors and traders.

India had granted Pakistan the MFN status in 1996. Pakistan had been reluctant to give the same status to India on the plea that there are other unresolved issues that should also be addressed.

Ties between the two countries deteriorated after the Mumbai terror attack in 2008 for which a Pakistan-based militant group was blamed. After years of tension, the two countries again started dialogue, that also led to Islamabad's decision to grant MFN status to India.

Steps have been taken to increase Pakistan's exports to India during the year 2011-12, including three agreements signed between India and Pakistan during the 7th round of talks to address the concerns of Pakistani exporters with reference to Non-Tariff Barriers.

Federal Minister Abbas Khan Afridi told the National Assembly that areas of cooperation with India, such as petroleum, electricity, agriculture and customs cooperation, have been identified.