"We have to move forward on the political front effectively for dispute resolution and also simultaneously look for developing trade and economic ties," Musharraf told a visiting Indian business delegation here.

After years of hostility that sometimes spilled over to fighting, the two sides launched a peace process early last year.

They have since restored road and travel links, most notably a bus service across the disputed borders of Kashmir, the troubled region that has been the cause of two of their three wars.

Musharraf said he hoped that increased interaction between the business leaders of Pakistan and India could bring about a better understanding of the issues between the two countries.

But he also warned that the root causes of the two countries' problems like the Kashmir dispute also must be addressed.

"The past accords between the (two) countries failed as they did not address the lingering disputes and brushed them under the carpet -- let us not do it again."

The Indian business delegation's leader described the meeting with Musharraf as positive.

"He was positive in promoting bilateral trade and economic activities," Onkar Kanwar told reporters.

"We conveyed to the president that trade between the two countries and an uninterrupted flow of business activities would be a win-win for both the countries."

Bilateral trade between India and Pakistan has risen from 161 million dollars in 2000 to 483.85 million dollars this year, with the balance tilted heavily in India's favor.

The Federation of Indian Chamber of Commerce and Industry estimates trade potential of up to six billion dollars.

India has been pressing Pakistan to grant it most favoured nationstatus, which would allow it to export goods with low duty costs.

India granted Pakistan MFN status in 1995 but Islamabad has been reluctant to reciprocate, linking trade to settlement of the dispute in Kashmir.

All rights reserved. © 2005 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.