The widely acclaimed Pakistani film Khuda Kay Liye (In the Name of God) explores the rift between radical and liberal Islam, and has been a hit in Pakistan.

Now the film is being screened across theaters in Indian cities. It is a rare event because intense, political rivalry has limited cultural interaction between the two countries for decades.

Nadish Bhatia of Percept Picture Company, which is marketing the film, says he does not know how it will fare at the box office. But he says its screening is a landmark.

"We are more proud to be the first ones to get a Pakistani film to India after 43 years, so for us, that definitely is a bigger high," Bhatia said.

Scene from Khuda Kay Liye

In Pakistan, several blockbusters produced by the Indian film industry known as Bollywood have been screened in recent months after Islamabad lifted a ban on films shot in India earlier this year. The ban was imposed in 1965 after the rivals fought a war.

But a peace process launched in 2004 has lowered tensions between the neighbors, and prompted Islamabad to allow an exchange of films between the two countries.

Pakistani filmmaker, Shoaib Mansoor, who directed Khuda Kay Liye says the exchange will open new markets to the film industry on both sides. He says it will also help to stem a decline in the Pakistani film industry, which is much smaller than Bollywood.

"More excitement is foreseen in the future. In competition it is always the underdog which benefits more, I am seeing the film industry that is completely down the drain in Pakistan will end up once again on its feet when the Indian films start coming over there. The cinema business will flourish," he said.

Scene from Khuda Kay Liye

India and Pakistan - once a single nation before being partitioned in 1947 - share a common culture.

Now, filmmakers on both sides want to draw on that common culture to establish deeper links. The Pakistani movie Khuda Kay Liye stars an Indian actor, Naseeruddin Shah. Pakistani actors, singers and composers have also been hired by Bollywood filmmakers in recent years.

Filmmaker Mansoor sees the trend intensifying.

"Just take my example. I have received a number of offers to do joint productions or work for Indian films as writer-director," Mansoor said. " So talent will prevail, whosoever deserves an opportunity will get one."

The South Asian neighbors have made slow progress on tackling their political differences since the peace process was launched. But people on both sides have used the opportunity to put decades of hostility firmly behind them and reach out to each other.