Friday, January 27 2006 20:14 Hrs (IST) - World Time -

Davos (Switzerland): India today (Jan 27,2006)mooted a Free Trade Pact between Asean and six countries including Japan, China, Korea, Australia and New Zealand aiming at a common economic community in East Asia.

"We need a common economic community in East Asia. The core will be ASEAN. We are now proposing ASEAN 3 plus India, Australia and New Zealand. A formal proposal has been put forward by our Prime Minister," Finance Minister P Chidambaram said at a meeting with Asian leaders and ADB president H Kuroda here at the World Economic Forum.

India has already signed and ratified the South Asian Free Trade Agreement (Safta) and signed a Comprehensive Economic Cooperation Agreement with Singapore, he said adding 'next we will sign a CECA with Asean soon.'

India has signed a framework agreement for free trade with Asean last year. But the minister outlined the need for a comprehensive economic treaty that takes care of investment and other financial matters.

To a query on whether India could sign a FTA with China, Chidambaram said "It is not inconcievable. Trade with China is growing very fast. Some time in future there could be a FTA with China," he said.

He also said there was a need to develop a Asian Bond Market where Asian nations could invest a significant portion of their burgeoning forex reserves.

There was also a need to set up a Asian Monetary Fund, he said, "We will engage in dialogue (for all these initiatives)," he added.