Pakistan and India agreed Saturday to ease stringent visa restrictions in a step intended to improve relations that were deeply tainted after the 2008 terrorist attacks in Mumbai.
The visa deal makes it considerably easier for pilgrims, tourists and businesspeople to cross borders and allows them to move around more freely.
Pakistani Foreign Minister Hina Rabbani Khar said the nuclear-armed rival nations also had agreed to liberalize their trading partnership.
"We will see a trade normalization process which treats India like any other country in the world," she said.
"We are looking at India with a completely different mindset," she said. "When Pakistan decides to change a position it has held to for 40 years and liberalize trade ties with India, Pakistan is sending a very very strong message of being willing to forge ahead without being hostage to the past."
Indians and Pakistanis celebrated Saturday's announcements as important baby steps toward normalizing ties but several prickly issues remain, among them terrorism and the highly contentious dispute over the Himalayan region of Kashmir.
Negotiations between Pakistan and India stalled almost four years ago after three days of coordinated attacks on Mumbai killed more than 160 people.
India blamed the siege on Lashkar-e-Tayyiba, a Pakistani-based militant group allied with al Qaeda.
"We agreed that terrorism poses a continuing threat to peace and security," India's External Affairs Minister S.M. Krishna told reporters Saturday.
"In this regard, the Pakistan side reiterated its commitment to bringing all perpetrators of the Mumbai terrorist attacks to justice expeditiously," he said.
India has already said that a speedy trial of remaining suspects in the Mumbai attacks would help warm relations between the South Asian neighbors.
Krishna described the talks as "cordial, frank and positive."
"I see the positive change in the atmosphere," he said, crediting Pakistan's leadership.
Khar stressed the need to not be held "hostage by history."
India and Pakistan both gained independence from Great Britain in August 1947. Since then, they have fought three wars.
Pakistani President Asif Ali Zardari met in April with Indian Prime Minister Manmohan Singh in New Delhi -- the first visit to India by a Pakistani head of state in seven years.
Zardari extended an invitation to Singh for a reciprocal visit. Krishna said Saturday that Singh was ready to visit unconditionally but that no date has been set yet.