India and Pakistan's foreign ministers hailed a new chapter in relations on Wednesday after their first talks in a year attempted to breath fresh life into the arch-rivals' stop-start peace process.

In an upbeat assessment after their meeting, Indian Foreign Minister S.M. Krishna said ties were back 'on the right track', while his Pakistani counterpart Hina Rabbani Khar spoke of a 'new era' of cooperation.

There was little in the way of substantive agreements to back up the general mood of optimism, with a joint statement envisaging a general bilateral effort to combat terrorism, increase trade and keep the peace dialogue going.

India suspended contacts with Pakistan after the 2008 Mumbai attacks which it blamed on Pakistan-based militants.

The peace process has struggled to gain any real traction since its formal resumption earlier this year in an atmosphere of mutual recrimination and mistrust.

"We have some distance to travel, but with an open mind and a constructive approach ... I am sure we can reach our desired destination of having a friendly and cooperative relationship," Krishna said.

India and Pakistan have fought three wars since independence in 1947, two of them triggered by their territorial dispute over Kashmir, which remains a core issue and major hurdle in any future comprehensive peace deal.

In her remarks to the reporters, Khar said there had been 'a mindset change' that had turned the resumed peace dialogue into an 'uninterrupted and uninterruptable' process.

"A new generation of Indians and Pakistanis will see a relationship that will hopefully be much different from the one that has been experienced in the last two decades," she said.

Khar, Pakistan's first female foreign minister, was appointed last week and, at just 34 years of age, some had questioned whether she was experienced enough to handle one of the world's most fraught cross-border relationships.

At 79, Krishna is 45 years her senior.

The pre-talks atmosphere had been soured by Khar's decision to meet with Kashmiri separatist leaders immediately after her arrival in New Delhi on Tuesday.

A senior Indian government source said the meeting was 'not a good idea at all' and served 'no useful purpose' in the context of the ongoing peace dialogue.

Both foreign ministers stressed the importance of the India-Pakistan relationship to ensuring peace in the wider South Asia region.

India and Pakistan are jockeying for influence in Afghanistan ahead of the planned US troop withdrawal and Washington sees stable India-Pakistan ties as crucial to Afghanistan's post-war viability.

"It is the Afghan dynamic.... that will define the regional context for Indo-Pak relations for years to come," said C. Raja Mohan, a senior fellow at the Centre for Policy Research in New Delhi.

Khar comes from one of Pakistan's leading political and land-owning clans and some observers say her appointment is evidence that the country is still run by select family dynasties.

"The people in power, including the military, are comfortable that she will follow whatever brief is given to her," Pakistan foreign policy analyst Hasan Askari said.

"She will not make waves," he added.

The media in India have made much of Khar's photogenic looks, with her image adorning the front pages of most newspapers on Wednesday.