Pakistan had previously linked trade liberalisation with India to a resolution of the dispute over Kashmir, over which the nations have fought two wars.
Correspondents say the move is a significant step towards boosting the peace process between the neighbours.
India has already extended most favoured nation status to Pakistan.
The status typically reduces tariffs and increases import quotas.
Bilateral trade is currently put at about $3bn (£1.87bn) and the two sides agreed at a recent meeting in Delhi to double that within three years.
Analysts say the Pakistani decision has come at a time when the country desperately needs trade concessions from international markets to prevent its economy from sinking further.
India and Pakistan resumed formal peace talks this year after they were broken off in the wake of the militant attacks in Mumbai (Bombay) in 2008