Prime Minister Imran Khan decided that Pakistan cannot go ahead with any trade with India under the current circumstances after holding consultations with key members of his Cabinet on importing cotton and sugar from the neighbouring country, a media report said on Saturday.

The prime minister after consultations on Friday instructed the Ministry of Commerce and his economic team to immediately take steps to facilitate the relevant sectors, value added, apparel and sugar, by finding alternative cheap sources of import of the needed commodities, the Dawn newspaper quoted sources as saying.

Various proposals have been presented to the Economic Coordination Committee (ECC) which considers these suggestions from an economic and commercial point of view. After consideration by the ECC, its decisions are presented to the Cabinet for ratification and final approval, the report said.

In the present case, a proposal was presented to the ECC to allow the import of cotton, cotton yarn and sugar from India keeping in view domestic requirements, it said.

With regards to the ECC decision to allow import of sugar, cotton and cotton yarn from India, Khan held consultations with key members of his Cabinet on Friday and decided that Pakistan could not go ahead with any trade with India under the current circumstances, it said.

The ECC had decided on commercial grounds to recommend these imports for the Cabinet's consideration.

While the decision was not on the formal agenda of the Cabinet meeting, the issue was brought up by Cabinet members and the prime minister instructed that the ECC's decision be deferred and immediately reviewed, the report said.

The Cabinet headed by Prime Minister Khan on Thursday rejected the proposal of the high-powered committee to import cotton from India, with Foreign Minister Shah Mahmood Qureshi asserting that there can be no normalisation of ties until New Delhi reverses its decision in 2019 to revoke the special status of Jammu and Kashmir.

Pakistan's U-turn on Thursday came a day after the ECC, under newly-appointed Finance Minister Hammad Azhar, recommended importing cotton and sugar from India, lifting a nearly two-year-long ban on its import from the neighbouring country amidst tensions over the Kashmir issue.

India has said that it desires normal neighbourly relations with Pakistan in an environment free of terror, hostility, and violence. India has said the onus is on Pakistan to create an environment free of terror and hostility.

India has also told Pakistan that “talks and terror” cannot go together and has asked Islamabad to take demonstrable steps against terror groups responsible for launching various attacks on India.

The ECC's decision had raised hopes of a partial revival of Pakistan-India bilateral trade relations, which were suspended after the August 5, 2019 decision of New Delhi to revoke the special status of Jammu and Kashmir.

In May 2020, Pakistan lifted the ban on the import of medicines and raw material of essential drugs from India amidst the COVID-19 pandemic.

India's move to revoke the special status of Jammu and Kashmir in 2019 angered Pakistan, which downgraded diplomatic ties and expelled the Indian High Commissioner in Islamabad. Pakistan also snapped all air and land links with India and suspended trade and railway services.