Musharraf urged countries with travel advisories against Pakistan to look at ground realities and review their policies which were based on perceptions.
"Realities in Karachi, Lahore, etc, are not of the kind that there should be travel advisories against Pakistan," he said.
The Conference was organised by the Board of Investment (BoI) to bring together businessmen of the two countries to explore investment and joint venture opportunities.
President Musharraf urged such countries to review their policies in line with the ground realties in Pakistan.
The President asked the gathering of leading businessmen from the two countries to interact and identify areas where they could contribute to enhance economic and trade ties between Pakistan and Italy.
He touched upon steps taken during the last four-and-a-half years that have transformed Pakistan into an economically stable country.
The President said that as a result of prudent economic policies, fiscal deficit has been brought down and current account deficit turned into surplus.
The debt servicing liabilities that were once 64 percent of the total budget have now been scaled down to under 25 percent, providing government with the fiscal space to increase spending on social sector development.
Similarly, he added, inflation was under 4 percent, GDP recorded 6.4 percent growth last year and Pakistan's stock market was the best performer in the world.
Highlighting main features of the country's liberal investment policy, the President stated that foreign investors could have 100 percent equity and there was no bar on remitting dividend, profits, fee, etc.
He underscored despite ups and down and other problems, not a single foreign investor has ever suffered.
President Musharraf also referred to reduced cost of business, owing to low interest rates and availability of cheap labour force.
The President told potential investors that the government was developing necessary infrastructure for investment and specially referred to the under construction Gwadar Port that was ideally located to benefit foreign investors.
He identified agro-based industry, telecom, IT, mining as some of the sectors where the Italian investors can invest.
The President also shared with participants efforts and contribution by Pakistan for peace and harmony in the region and the world.
In this respect, he underlined Pakistan's role as the front-line state in the fight against terrorism.
He, however, stressed that all actions against terrorism were of short-term nature and called for having a long-term policy to strike at the root causes that breed extremism and militancy.
In this respect, he said, Pakistan offered a strategy of "enlightened moderation", which urges the Muslim world to shun extremism and militancy and focus on human resource development.
It calls on the developed world to help resolve disputes involving Muslims, in a just manner and also assist them in their socio-economic development.
In the regional context, the President, Pakistan was doing its utmost to bring peace and harmony to the war-stricken Afghanistan.
He said Pakistan was fully supporting the election process in that country and contributing resources in its reconstruction efforts.
On Pak-India relations, he added, Pakistan was trying to normalise ties with India and moving on dual channels of CBMs and dialogue process. He, however, urged that both these have to move together in tandem.
The President also spoke of the anti-terror operations in the South Waziristan region to flush out foreign terrorists from the border area.
He reiterated that Pakistan would not allow anyone to use its territory for terrorism inside the country or anywhere in the world.