Over 40 top Pakistani businessmen plan to visit India next month in a bid to boost trade ties as tensions ease between the nuclear-armed rivals, a business leader said on Monday.

"The recent statements of prime ministers of both countries have encouraged us to plan this visit with the help of our Indian counterparts," Senator Ilyas Ahmed Bilour, co-president of India-Pakistan Chamber of Commerce and Industry told Reuters.

Trade in many items between the two countries is banned.

Official bilateral trade was just $204 million in the year to March 2002. Traders have had to carry out the bulk of their business unofficially through third countries, such as Dubai or Singapore.

Economists say the potential is massive should restrictions be lifted, given the combined population of India and Pakistan of around 1.15 billion.

Bilour said exports that could be expanded to India included cotton, garments and rock salt, while expanded Indian imports could include chemicals, medicines and other items.

"An increase in the trade would also play a role in promoting friendly ties. It could easily pass well over the billion dollar mark annually once relations improve," he said.

Pakistani and Indian leaders spoke by telephone last month, the first high-level contact since 2001, when an attack on the India parliament that was blamed on Pakistani-based extremists brought them to the brink of a fourth war.

They have announced moves to improve ties, including the resumption of full diplomatic relations and plans to restore transport links.

Last week Prime Minister Zafarullah Khan Jamali said it was time the rivals exchanged political rivalry for economic cooperation.

Bilour said the Pakistani trade delegation would include 40 to 50 businessmen and industrialists and leave for India on June 24 or 25.

The IPCCI was formed in 1999 when Prime Minister Atal Bihari Vajpayee visited Lahore for a peace summit with his Pakistani counterpart, Nawaz Sharif. But it had become almost defunct amid simmering tensions of the past few years.

Bilour said that despite tensions, Pakistani IPCCI members had remained in touch with Indian businessmen by telephone, hoping that relations would one day take a turn for the better.

"Both countries would benefit from increased trade because of lower transportation costs," he said.