"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.