However, during the Home Secretary-level talks here, the two sides agreed to enhance cooperation between their investigative agencies on issues of mutual concerns, including the 26/11 attacks.
Islamabad also agreed in principle to receive an Indian judicial commission for probe into the Mumbai attacks.
At the meeting between Home Secretary R K Singh and his Pakistani counterpart Khwaja Siddique Akbar, the two countries agreed that terrorism poses continuing threat to peace and full normalisation of bilateral relations.
A joint statement issued by India and Pakistan after the two-day talks said they agreed to sign a new visa agreement at an early date.
Though Indian officials were expecting the visa pact to be signed at the conclusion of the talks, Interior Minister Rehman Malik said earlier in the day that the agreement involved important issues and should be concluded at the political level.
Meanwhile in New Delhi, Foreign Secretary Ranjan Mathai attributed the failure of the signing of the agreement to "some delay in the procedure" in Pakistan and its Interior Minister`s desire for political participation in the exercise.
India had gone to the Home Secretary-level talks in Islamabad "fully prepared" to sign the visa agreement as per the decision taken during the discussion between Pakistan President Asif Ali Zardari and Prime Minister Manmohan Singh in April this year, he told reporters.
But "we also have reports that the Pakistani side referred to some delay in its procedure and the Pakistan Interior Minister`s desire for political participation" in signing of the visa pact, Mathai said.
"Both sides had attached a lot of importance on signing the visa agreement", he added.