This week's trade progress is fine, but what Pakistan and India really need is rapprochment on security concerns.
For Pakistan and India, peace starts with a trade pact
Pakistan's decision this week to grant India most favoured nation status was a rare piece of good news in a region marred by historical rivalries, conflict and terrorism.
It was also long overdue, given that India granted Pakistan this status in 1996. Moreover, the move on Wednesday was in keeping with Islamabad's obligations as a World Trade Organisation member. In time it is hoped this gesture will boost bilateral trade, a possible boon to both nations.
Whether this decision brings the economic windfall some in Pakistan hope for remains to be seen. But there is no question that as a symbolic measure this gesture is welcome at this time.
For too long politics has stalled economic progress along one of Asia's most dangerous - and nuclear-armed - borders. Clearly, Islamabad is finally taking note of its economic realities in the wake of declining US and international appetites to provide aid. Economic and other partnerships with China have increased in recent years, but they are still no substitute for access to the Indian market.
Previously, Pakistan had linked trade normalisation to settlement of the Kashmir dispute, but with growing economic, security and political troubles, the country seems to be recalibrating on some counts. As Pakistan's information minister, Firdous Ashiq Awan, said in announcing the government's trade decision: "We cannot live in regional isolation."
The measure, which appears to have approval from many of Pakistan's power centres - including the most crucial one, the military - brings much-needed goodwill to the diplomatic talks between Islamabad and New Delhi that have made little progress since they resumed last year.
And yet more than six decades of tension will not be healed with the swipe of a pen.
Most favoured nation trading status may be a tactical shift on the part of Pakistan's military to back down and agree to de-link Kashmir from normalising trade ties, but it will not be seen on either side of the border as a strategic shift.
Indeed, the issue of Pakistani military support for terrorist groups that target India will remain a fundamental concern for New Delhi. India is also increasingly concerned over the safety of Pakistan's nuclear weapons as security in the country rapidly deteriorates.
But the issue on which the two sides are most likely to remain at loggerheads in the near term is the future of Afghanistan.
The trade announcement came on a day when foreign ministers of the two countries were meeting in Istanbul with other players to seek a regional solution to end the war in Afghanistan. As the United States looks to an endgame in Afghanistan with a plan to withdraw all its combat troops by 2014, it is increasingly seeking a political solution to the conflict. Regional players - India, Pakistan and China among them - will be vital to an American exit.
But each of these players, worried about how an international troop withdrawal might trigger greater instability, is taking steps based on its own calculations. For India and Pakistan, these steps are often at cross purposes. And as in the dispute over Kashmir, there are no easy solutions.
India worries that a future Afghanistan, which may include elements of the Taliban in power, will pose an ever greater security challenge than today.
Pakistan, meanwhile, which has long considered Afghanistan part of its strategic depth policy, is wary of an India-friendly government in Kabul.
A recent strategic agreement between Kabul and New Delhi includes expansion of training of Afghan security forces by India, in particular the Afghan national police, This is affirmation that New Delhi plans to deepen its involvement in Afghanistan in a bid for greater stability - precisely the kind of partnership that raises Pakistan's hackles.
Meanwhile Pakistan wants a key role in the Afghan reconciliation process, given its historic ties with groups like the Afghan Taliban and the Haqqani network. This makes India nervous. Further, Pakistan may prove unable to deliver militants to the negotiating table even if it wanted to.
Any degree of rapprochement on security issues such as these would bring India and Pakistan together better than any trade deal.
Amid such regional realities, a true breakthrough in India-Pakistan peace talks remains unlikely. But any move that lowers the trust deficit between them will be welcomed in both countries, and across the region.
Normalising trade is a positive step for Pakistan to take, but India will withhold judgement on the move's effectiveness. As the Indian political analyst Nitin Pai said of the move, Indian business will still be "cautious to see whether the Pakistani government is able to create an environment of trust necessary for trade to flourish".
Nonetheless, the two countries can build on this momentum to initiate a broader set of policies aimed at increasing people-to-people interaction across the border, and improving a relationship in dire need of a thaw.
Both capitals could start, for example, with easing visa restrictions and encouraging cultural links that allow for artists to collaborate.
After all, India's Bollywood films and Pakistan's Coke Studio music television have proved better at winning hearts and minds on the other side of the border than their governments ever have.
Jayshree Bajoria is a senior staff writer at CFR.org, the website of the Council on Foreign Relations in New York, specialising on Asia