LAHORE, Feb 17: Indian External Affairs Minister Natwar Singh said here on Thursday that a continuous process of confidence-building between Pakistan and India would help address 'more difficult issues' and promote friendship.

"Once we are able to set aside our suspicions and misapprehensions through a continuous and persistent process of confidence building, I am sure that we would be in a position to tackle some of the more complex issues that plague our relations," he said.

Mr Singh who was speaking at a reception hosted by Safma (South Asian Free Media Association), announced the establishment of a high-level study group to identify areas of potential cooperation. Its first meeting will be held on Feb 22 and 23, he said, adding he hoped specific areas of convergence would be identified without any delay.

Indian Foreign Secretary Shayan Saran and High Commissioner to Pakistan Shiv Shankar Menon and Pakistan's High Commissioner to India Aziz Ahmad Khan were present on the occasion. The reception was attended by political leaders, retired army officers, human rights and peace activists, intellectuals and media personnel.

Mr Singh said India sincerely sought a cooperative and constructive relationship with Pakistan. For this, it was imperative to invest in the ongoing process of engagement and confidence building, he said.

He said India had proposed several measures to Pakistan which would help bridge differences and build greater understanding and mutual trust. New Delhi, he said, was committed to peace and friendship with Pakistan and it had worked actively to put words into practice.

"As you know, only yesterday we worked out with Pakistan mutually acceptable procedures for a bus service between Srinagar and Muzaffarabad. We have also agreed to consider an energy corridor through Pakistan, subject to satisfaction of our concerns related to security and assured supplies," he said.

Mr Singh mentioned the beginning of a bus service between Amritsar and Lahore in near future, and Sikh holy places such as Nankana Sahib. He said Islamabad had agreed to work with New Delhi for an early opening of the Khokhrapar-Munabao rail link.

He also said that during his meetings with his Pakistani counterpart it had been decided to finalise agreements on pre-notification of missile tests. MoUs between India's coastguards and Pakistan's mari-time security agency and between narcotics control authorities, agreement on preventing incidents at sea and reducing risk of nuclear accident or preventing unauthorised use of nuclear weapons were also signed during Mr Singh's visit.

All these moves have come on the heels of significant progress made over the past year in bilateral relations. "One round of the composite dialogue has been completed and the second initiated," Mr Singh said.

All this progress had been possible also because of an overwhelming desire among peoples of both countries for peaceful interaction, he said. Greater people-to-people contact would open doors for a better appreciation of each other's viewpoint. "Our policy has been to be people-centric and to promote people-to-people exchanges," he said.

Mr Singh said as a measure of its sincerity and goodwill, India had unilaterally liberalised the visa regime for Pakistanis wishing to travel to India, including a system of visa on arrival for certain categories.

India, he said, did not have such facility for nationals of any other country and was looking forward to group tours very soon. It was already implementing a special visa regime for Pakistani students wishing to study in Indian educational institutions.

He said 50 per cent of India's foreign trade was with countries in the East. Its total trade target with ASEAN was $30 billion in 2007, but India-Pakistan trade had grown slowly as compared with that among other Saarc members.

"Unfortunately, Pakistan's position as a link between energy sources in Central and West Asia and the growing demand for energy in South Asia has not been leveraged for making long-term arrangements that would be mutually beneficial," he complained.

Nevertheless, he said, India attached importance to economic and commercial cooperation with Pakistan with belief that this would help address common challenges of poverty and imbalances in the development of the region. He said both countries could achieve their goals if they combined their efforts.

"We need to build mutual trust for which trade and economic link can act as a cementing force. President Musharraf and Prime Minister Shaukat Aziz underlined this aspect in their remarks to me," he concluded.