Trade was suspended after Indian authorities Friday detained a Pakistani truck driver accused of drug trafficking.
Kashmir has been divided between India and Pakistan since the two countries won independence from Britain in 1947. Both claim the scenic Himalayan territory in full.
Barter trade across the de facto border began in 2008 as part of peace efforts, but it is frequently disrupted by disputes.
“A five-member Pakistani delegation met Indian officials in the border town of Chakothi and presented its demands,” top local administration official Bashir Mughal, who led the delegation, told AFP.
The Indians requested the release of 50 trucks held by the Pakistanis, who in turn asked for access to the detained driver and release of 22 trucks held by on the other side.
“Indian officials said they will send back our 21 trucks and in return we will have to give them back their 50 trucks,” Mughal said.
However the Pakistani delegation turned down the Indian offer and told them “we want all our 22 trucks back,” he said.
The two sides agreed to return to the negotiating table after consulting their respective governments.
Indian authorities informed Pakistani officials on Friday evening that they had stopped 22 Pakistani trucks which crossed the Line of Control(LOC) earlier that day.
Indian officials said they had discovered 12 kilograms (26 pounds) of opium in a truck carrying oranges and detained the driver.
After the incident, authorities also held 50 Indian trucks on the Pakistani Kashmir side, because traffic crosses the border simultaneously, saying that India was not entitled to stop Pakistani drivers on the grounds of smuggling, but should hand them over to be dealt with.
Pakistan has also temporarily suspended a special bus service which operates twice a week and allows families separated by the border to visit their relatives- AFP