Pakistani businessmen have signed a major contract to buy one million kilograms of tea from plantations in Tamil Nadu and Kerala.

Officials said this is a major step towards boosting Indo-Pak trade relations.

The contract follows the visit of a 17-member Pakistan tea delegation to the plantations across southern India in the first week of October.

"This is just a beginning. Tea trade between India and Pakistan will go up in the coming months. We expect that Pakistan will import more tea from India," the United Planters' Association of Southern India president B B Mediaiah told rediff.com.

Pakistani businessmen were led by Saaed Ahemed Khawja, chairman of Pakistan Tea Association.

The Pakistani delegation toured tea plantations in Munnar, Coonoor and other locations were "impressed with the southern Indian tea."

"Already they have signed contracts to purchase one million kg of tea. They have also assured us that after Ramzan, the Pakistan businessmen will visit India again to buy more teas," the UPASI president disclosed.

Mediaiah said that the Pakistani businessmen's eagerness to buy tea from southern India would considerably help the Indian tea growers who have been reeling under a price decrease in the last few years.

"It also helps to cement trade relations between India and Pakistan," he said.

"Tea trade between India and Pakistan will help create a stable trade ties and good neighbourly relations between the two countries," the UPASI president added.

Pakistan is the third largest importer of tea in the world.

During the meetings that UPASI officials had with the Pakistani tea delegation, they decided to urge both the governments to take the initiative for a free trade agreement in Asia. India does not have an FTA with Pakistan.

Therefore, Pakistan, which has an annual demand of 135 million kilogram of tea, meets nearly 99 per cent through imports.

Kenya, whose quality and price India finds difficult to match, is the biggest tea exporter to Pakistan.

UPASI officials said that Pakistan -- as the world's third largest importer of tea -- and India -- as a major producer of tea -- could work jointly to have a single market for the commodity in Asia.

Mediaiah said that a team of tea growers from India would visit Pakistan in a few months to promote tea exports to the neighbouring nation.

"We want tea to be also the reason for the closer ties with India and Pakistan," the UPASI president said.