Raymond, an Indian suiting and fabrics conglomerate, will on Friday formally open its first shop in Pakistan, where business leaders welcomed it as a step towards closer trade ties between the two nuclear rivals.

NexSource Pakistan, which acquired the rights to sell Raymond suiting in Clifton, one of the most upscale neighbourhoods in business capital Karachi, said it was a major acquisition.

"They wanted to bring Raymond to Pakistan and we offered to be their partner," said one of its directors, Najmus Saqib.

Nexsource say they expect to reap good business after an aggressive advertising campaign in a city whose wealthier residents are sartorially obsessed and where fashion is a key driver of business.

"People are crazy about clothing and dressing, and they already know Raymond," Saqib said. "We just have to let them know that it is here."

India and Pakistan have fought three wars since independence from British rule in 1947 and relations are traditionally strained.

New Delhi broke off peace talks with Islamabad after Pakistani gunmen killed 166 people in Mumbai in 2008. But lower-level talks have since resumed, focusing largely on trade and visas.

New Pakistani Prime Minister Nawaz Sharif, who is one of the country's wealthiest businessmen, has called for closer rapprochement with India since winning general elections in May.

Both sides have been engaged in deadly exchanges this year across the unofficial border in Muslim-majority Kashmir, which is held in part by each country but claimed in full by both.

On Wednesday, Pakistani officials said a Pakistani girl was killed when Indian troops opened fire.

However NexSource executive Saqib said he believed the enormous Indian market represented massive business opportunities for Pakistan.

"We expect a good response (through Raymond) but we believe it is a futuristic investment as we can explore a market 10 times bigger than ours," said Saqib.

Pakistani business leaders welcome the arrival of the Indian brand, which was founded in 1925 and whose Karachi shop is to be inaugurated formally later on Friday.

"As long as there is healthy competition we welcome this move," said Amin Hashwani, president of the Pakistan India Business Forum.

Nexsource say they plan to open more Raymond outlets in Islamabad, Lahore and Faisalabad before the end of the year.