Friday, December 9 2005 14:03 Hrs (IST) - World Time -

Kuala Lumpur: India and the ten-member Asean grouping are expected to start a long-awaited Free Trade Agreement (FTA) by January 2007 as the negotiation between the two sides are on the verge of completion.

"The negotiation is on the verge of completion. We have passed many, many milestones," Commerce Minister Kamal Nath said here today, adding that with an FTA in place trade between India and Asean could go up by 30 percent annually.

Nath is in Kuala Lumpur to attend the Asean-India ministerial-level meeting.

The FTA between Asean and India encountered some hiccups after disagreements over textiles and agriculture.

The minister told reporters that any differences will soon be sorted out and an FTA should be in place by January 2007. He did not refer to any differences.

India and Asean agreed in 2002 to begin talks on signing of an FTA, to be implemented by 2006. However, differences crept up over the interpretation of rules of origin and the talks were temporarily abandoned.

Last year trade between Asean and India recorded a big jump with an increase of 40.8 percent over the previous year from 12.5 billion dollars to 17.6 billion.

However, this seems very marginal considering ASEAN's trade with China, US and Europe, which is at least 100 billion dollars each.

Nath added that ASEAN and India were two large economies and both would gain by using their 'complementarities and strengths. That's what economic cooperation is all about.'

The minister, referring to the final document to be adopted by the first ever East Asia Summit next week, said the words used in the document did not matter as what mattered was the 'greater economic and people-to-people cooperation, more Fraternity'.

This had to be emphasized, he said, adding that is "What we seek?"