President Pervez Musharraf said Tuesday he is looking forward to "substantive" talks with Indian Prime Minister Manmohan Singh when he visits Pakistan. Musharraf told reporters in this southern port city that the two countries need to resolve all outstanding disputes, including Kashmir, the reason for two of their three wars.

He added that progress had been made in diplomatic-level talks between the two countries in New Delhi last week.

"We are looking forward for a substantive meeting with the Indian prime minister during his forthcoming visit here," Musharraf after inagurating an international defence exhibition.

No date has been announced so far for the visit of the Indian leader who accepted Musharraf's invitation when he met the Pakistani military strongman at Havana in September.

The talks in New Delhi between the foreign secretaries set up a joint counter-terrorism group for sharing information. They also prepared a draft agreement on reducing risk of nuclear accidents.

Pakistan has hosted the annual defence exhibition to showcase its military hardware with an eye on promoting arms sales that, according to officials, earned the country 100 million dollars last year.

Musharraf said he was satisfied with the interest of the world's leading defence production companies.

"Over 90 per cent of the world defence production companies are participating in the exhibition, which showed their confidence in Pakistan."

The participants include companies from the United States, France, Germany, China and Turkey. Organisers said this year's theme was "Arms for Peace".

Rival India has not been invited, an official said.

Pakistan put up on display its own versions of the Russian T59 tank as well as a submarine built under a transfer of technology deal with France.

Also on display is a model of the JF-7 Thunder fighter aircraft which is jointly made with China.