Beijing: India and China have formally launched talks to study the feasibility of signing a bilateral Free Trade Agreement (FTA) as well as a Comprehensive Economic Cooperation Agreement (CECA) to cement their booming commercial ties, official sources said today (Mar 25, 2004).

Senior officials from the two sides discussed the possibility of signing a FTA and CECA during the first meeting of the Sino-Indian Joint Study Group (JSG) on trade and economic cooperation, the sources said.

The JSG held a "working meeting" from March 22-23 and discussed measures for comprehensive trade and economic cooperation between India and China, they said, adding the two sides also discussed the framework, work contents and other modalities of the functioning of the JSG.

The study group was recently constituted on the basis of a mandate contained in the first-ever India-China Joint Declaration signed during Prime Minister Atal Bihari Vajpayee's historic visit to Beijing last June.

Both sides expressed confidence that they would work together in order to be able to submit to the two Governments economic and trade cooperation proposals by end December 2004.

As per the India-China Joint Declaration, the JSG was expected to submit the report to the two Governments by end of June 2004.

The JSG comprises officials and economic experts of the two sides and has the mandate to study the potential factors for expanding bilateral trade and economic cooperation and work out a five-year plan for Sino-Indian trade and economic development and to encourage the enterprises of the two sides to strengthen cooperation.

The first meeting of the JSG was jointly chaired by the Deputy Governor of Reserve Bank of India Rakesh Mohan and Chinese Vice Minister of Commerce An Min.

During the meeting, the newly appointed Chinese Minister of Commerce Bo Xilai met with Mohan and expressed confidence in forging a strong trade and economic relationship with India.

While noting that in 2003, Sino-Indian bilateral trade touched a record figure of $ 7.6 billion, up 53.6 per cent over 2002, Bo said the two countries also had "excellent cooperation" in bilateral and multilateral fora, which was encouraging.

"There are strong economic complementarities between China and India with a bright future for economic acts have similar problems and concerns relating to economic development and for improving the standard of living of their people, there is enormous potential for economic cooperation between China and India, he said.

"The Indian side is willing to strengthen understanding and cooperation and together attain the goals of the JSG thereby contributing to mutual economic development," Mohan said.