LAHORE (BLOOMBERG) - Pakistan's government is meeting on Wednesday (March 31) to consider resuming trade with India, in the latest sign that tensions are easing between the two nations.

Prime Minister Imran Khan's Cabinet will make a final decision on the proposal after it is discussed by the body's economic coordination committee, according to a government official who requested not to be named since the matter is private.

Pakistan's commerce division spokesman didn't respond to a request for a comment.

Pakistan downgraded diplomatic relations and suspended bilateral trade with India in August 2019 after New Delhi revoked autonomy for the disputed Muslim-majority state of Jammu and Kashmir.

The nuclear-armed neighbours surprised the world last month with a rare joint commitment to respect a 2003 ceasefire agreement along a disputed border that has seen three wars and regular gunfire.

The India-Pakistan ceasefire marked a milestone in secret talks brokered by the United Arab Emirates, Bloomberg reported earlier this month.

In a further sign of thawing relations, Mr Khan replied to Prime Minister Narendra Modi's greetings on Pakistan Day on March 23 with a letter on Monday calling for the creation of an "enabling environment" between the two countries to resolve outstanding issues.

Pakistan's army chief Qamar Javed Bajwa also asked India "to bury the past and move forward" in rare comments made this month.

Pakistan is looking to procure cotton after local production is estimated to have dropped below six million bales, which would be lowest in at least 30 years.