Gilani made the remarks while addressing a conference of top businessmen of the two countries in the capital of Punjab province. He said improved ties with India "are important for us as it offers a billion-plus market to the Pakistani exporters".
The premier said that over the past 12 months, the two countries had "moved fast not just to normalise relations but remove those irritants which hamper trade and economic relations".
"It was in April 2011 when the two countries announced their intention to normalise bilateral trade relations. And by April 2012, we have made huge strides in this direction," he said.
Pakistan decided to scrap the positive list regime for imports from India and replace it with a negative list and the Wagah-Attari Trade Gate, which opened recently, will go a long way in boosting the volume of trade, he said.
At the same time, Gilani warned, the two sides must remain vigilant to thwart elements that could endanger the peace process which resumed last year. "I must caution that recent successes do not mean that we should become complacent. We face many challenges and threats from forces inimical to peace," he said.
"We are passing through turbulent times in our history in which non-state actors are determined to harm the peace process. Such forces are present on both sides of the border and we have to remain vigilant that they are not able to derail our hard earned gains," he said without giving details. Gilani said he had extended "unwavering support" to peace and people-to-people contacts.
"Notwithstanding the ups and downs in our bilateral relations, our support to the cause of peace and normalisation of relations with India has remained steadfast," Gilani said.
"This is because trade between our countries is to our best advantage. Let me add here that Pakistan's closest friend and strategic partner, China, is also in favour of our normalisation of relations with India," Gilani said.
Welcoming India's announcement about allowing foreign direct investments from Pakistan, he said his government was now awaiting "some practical steps" by New Delhi to remove non-tariff barriers that hamper Pakistani exports to the Indian market.
Gilani listed steps taken by his government to revive Pakistan's struggling economy that was hit by the global financial crisis and natural disasters in recent years.
He said the government had pushed a reform agenda and stayed committed to policies of economic liberalisation, deregulation and privatisation.
Though Pakistan achieved record exports of USD 25 billion in the last fiscal year, the country cannot realise its full potential without enhancing regional trade, he said.
"Therefore, improved relations with India are important for us as it offers a billion-plus market to the Pakistani exporters," he remarked.
There are many sectors with huge trade potential and opportunities for collaboration, including IT, engineering, education and health, and a liberal trade regime will ensure the flow of cheaper imports for both countries due to their geographical proximity and lower freight costs, Gilani said.
"Our textiles, I am told, have a huge market across the border. Similarly, India can get buyers for its chemicals, pharmaceutical items, engineering goods (and) cement among many others," he said.
Gilani also said poverty, disease and ignorance should not be the "fate of the peoples of the two countries anymore".