In a volte-face, Pakistan's Cabinet on Thursday rejected a proposal of the Economic Coordination Committee (ECC) to import cotton and sugar from India, according to a media report.

The decision comes a day after Pakistan's new Finance Minister Hammad Azhar on Wednesday announced to lift a nearly-two year old ban on the import of cotton and sugar from India after a meeting of the ECC chaired by him.

However, a Cabinet meeting chaired by Prime Minister Imran Khan on Thursday rejected the ECC proposal to import cotton yarn and sugar from India, Geo TV reported, citing sources.

There was no official word on the decision of the Cabinet.

Ahead of the Cabinet meeting, Khan's close aide and Minister for Human Rights Shireen Mazari said that all ECC decisions have to be approved by Cabinet and only then can they be seen as "approved" by the government.

"Just for the record - All ECC decisions have to be approved by Cabinet & only then they can be seen as "approved by govt"! So today in the Cabinet there will be discussion on ECC decisions including trade with India & then the govt decision will be taken! Media should be aware of this atleast," Mazari, known for her hawkish stand on Kashmir, tweeted.

Azhar's announcement on Wednesday to import cotton and sugar from India had raised hopes of a partial revival of bilateral trade relations, which were suspended after the August 5, 2019 decision of New Delhi to revoke the special status of Jammu and Kashmir.

India is the world's biggest producer of cotton and the second biggest sugar manufacturer.

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

Ties between India and Pakistan nose-dived after a terror attack on the Pathankot Air Force base in 2016 by terror groups based in Pakistan. Subsequent attacks, including one on an Indian Army camp in Uri, further deteriorated the relationship.

The ties strained further after India's war planes pounded a Jaish-e-Mohammed terrorist training camp deep inside Pakistan on February 26, 2019 in response to the Pulwama terror attack in 2019 in which 40 CRPF jawans were killed.

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