China and India, the world's most populous nations, will finish a joint study on a potential trade pact in the coming months, according to a senior trade official.

"Governmental agencies and research institutions from the two sides, headed by the commerce ministry and the Indian department of commerce, have conducted a feasibility study on the regional trade arrangement," Vice-Minister of Commerce Yi Xiaozhun said in an online interview yesterday.

"We expect to complete the study by October," he added.

The study was kicked off in New Delhi in March 2006. So far, three rounds of working panels have been held studying issues concerning trade in goods, trade in service and investment.

Yi said the study will play a key role in the economic integration in Asia if it leads to a regional trade pact linking China and India. According to statistics from the Ministry of Commerce, trade between China and India hit $24.9 billion last year, exceeding the $20 billion goal two years ahead of target.

The two Asian giants, among the world's fastest growing economies, signed an agreement in 2005 pledging to bring bilateral trade volume to $20 billion by 2008.

According to the ministry, India was China's 10th-largest trade partner in 2006, while Indian statistics showed China was India's second-largest trade partner after the United States.

Investment in India, approved by the ministry, totaled $17 million by the end of last year, mainly in the sectors of electronics, communications and light industry.

Apart from India, China is seeking more regional economic cooperation while the Doha Round of the World Trade Organization is still in limbo, Yi said.

China and Peru are expected to finish a joint study on a potential free trade agreement in three months. The first round of the study was held in Beijing earlier this month.

Source: China Daily