Khan, who led Pakistan to their only World Cup triumph in 1992, is considered one of the sport's greatest all-rounders and his enduring popularity from his cricketing success with Pakistan helped propel into power in last year's elections.
Khan said mental strength will be vital on Sunday.
"Given the intensity of the match, both teams will come under great mental pressure and the power of the mind will decide the outcome of the match today," Khan said on Twitter.
"All fears of losing should be banished from the mind as the mind can only process one thought at a time. Fear of losing leads to a negative and defensive strategy."
Cricket matches between the two countries are among the most intense sporting rivalries on the planet, and the game on Sunday has an added bite following a military clash between the two nations earlier this year, which included their warplanes battling a dogfight over the disputed Kashmir region's skies.
The South Asian neighbours have already fought three wars since gaining independence in 1947, and former Pakistan cricket captain Waqar Younis once memorably said matches between the two nations were neither sport nor war, but "somewhere in between".
Pakistan boast a superior head-to-head record against India in one-day internationals overall but has lost all six of their World Cup matches.
Pakistan have lost two of their four games and are ninth in the 10-team standings. The country's only win came against hosts and pre-tournament favourites England while their match against Sri Lanka was washed out.
India are also among the favourites to lift the trophy on July 14 and are widely expected to triumph in Sunday's encounter, although there is a strong chance the match could be impacted by rain.
Two years ago Pakistan shocked India in the final of the Champions Trophy tournament, for their first win against their bitter rivals in a global tournament.
Afterwards, celebratory gunfire echoed around major Pakistani cities as people thronged the streets to celebrate,
Khan said the right attitude could be the key to the team's success once again.
"Even though India may be the favourites, banish all fear of losing. Just give your best and fight till the last ball," he said.
(Reporting by Saad Sayeed; editing by Drazen Jorgic and Sudipto Ganguly)
