Lahore High Court Chief Justice Sheikh Azmat Saeed directed the Commerce Ministry and Film Censor Board to file their replies to the petition filed by film producer Kamran Ijaz.
Ijaz's counsel told the court yesterday that the exhibition of Indian films had a "detrimental effect" on the Pakistani film industry and had resulted in loss of revenues and unemployment.
The counsel contended that the screening of Indian films was against the law should be banned.
Film industry insiders have attributed a recent increase in the number of movie-goers to the import of the latest Hollywood and Bollywood movies.
Most big Bollywood productions are screened in Pakistan days after their release in India.
Bollywood stars like Amitabh Bachchan and Shah Rukh Khan have huge followings in Pakistan and pirated DVDs of Indian movies are widely available across the country.
After being banned from Pakistani screens for decades, Bollywood films made a comeback several years ago when the regime of former military ruler Pervez Musharraf eased restrictions on movie imports.