India plans to export petrol and diesel to Pakistan to help its rival meet its energy needs and to open up a new market for Indian refiners such as giant Reliance Industries, a report said.
"Pakistan is keen to import refined petroleum products from across the border to save costs," the Economic Times said on Monday, quoting an Indian government official with "direct knowledge" of the plan.
The Indian side was due to put the final touches on the plan before a two-day meeting starting Wednesday between the commerce secretaries of India and Pakistan in Islamabad, the newspaper said.
The meeting is aimed at renewing trade ties which have been at a standstill since a 2008 militant attack in Mumbai that killed 166 people. India blamed the attack on the banned Pakistan-based Islamist group Lashkar-e-Taiba.
India imports about three-quarters of the oil it consumes but its refining capacity has expanded rapidly, making it a key player in the international market.
The exports will open up a new market for large refinery players such as Reliance Industries and Essar Oil, the Economic Times said.
Acrimonious ties between the neighbours eased last month when Indian Prime Minister Manmohan Singh and his Pakistani counterpart, Yusuf Raza Gilani, watched an India-Pakistan World Cup cricket match together in northern India.
The nuclear-armed nations have fought three wars since attaining independence in 1947, two over the disputed territory of Kashmir.
Indian officials believe greater trade would force the nations to maintain friendly ties and that India is in a position to meet Pakistan's fuel demands, according to the newspaper.
Pakistan has a 12-million-tonne refining capacity which satisfies only half of its annual requirements, while India exports about 25 percent of its 185-million-tonne refining capacity, according to official data.