The talks are part of a slow moving peace process started in January 2004 to resolve differences between the bitter rivals including the six-decade old Kashmir dispute.

The Pakistani team for Tuesday's talks is headed by Commerce Secretary Syed Asif Shah while the Indian side is led by Gopal K. Pillai, the Indian government statement said.

"The agenda for the talks includes trade in goods and services, tea exports from India, joint registration of basmati rice, including new items for trade such as cement," the statement said.

The joint registration for basmati will ensure third parties do not benefit from squabbles between the South Asian nations to register the long-grained aromatic grain as unique to their area of production in India and Pakistan, said Pravin Anand, an expert in patent and copyright laws.

Pakistan exports to India stood at 323 million dollars while Indian exports to Pakistan crossed one billion dollars in 2005-2006.

The neighbours will also discuss the launch of a truck service through the Wagah-Attari border crossing in India's northern Punjab state.

At present, goods are brought up to the land crossing at Wagah and then carried by labourers across the border and loaded onto waiting trucks.

"The arrangement we have now is tedious and we are trying to change that," said an Indian official who wished to remain unnamed.

Since 2004, India and Pakistan have increased transport links adding several buses routes including one connecting Srinagar, capital of Indian held Kashmir with Muzaffarabad, administrative headquarters of Pakistan controlled Kashmir.