The chief minister said his government was working towards making such trade possible between the two parts of the state controlled by India and Pakistan.
Abdullah was addressing a function in Surankote in Poonch district.
"My government is making efforts to help conversion of the present system of barter trade across LoC (Line of Control) into normal trade through the transaction of money.
"The state government has also taken up the issue of allowing telephone communication between traders of the two sides as also allowing the trade for all feasible items.
"Instead of identifying the goods for trade across the LoC, the items not allowed for trade should be listed, and rest left free for traders without any bar."
Abdullah said these initiatives will not only help trade to flourish but become part of the confidence building measures between India and Pakistan.
At present, cross-LoC trade takes place from Chakan-Da-Bagh in Poonch district in the Jammu region and Salamabad near Uri town in Baramulla district in the Kashmir Valley.
In the absence of any banking facilities between the traders of the two sides, goods sent and received are balanced with their proforma values, based on a primitive system of barter trade.
Besides, the trading list is restricted to 22 kinds of goods including vegetables, fruit, handicrafts and footwear.
Trade between the two parts of Kashmir was started on October 22, 2008.