India and Australia have agreed to study the feasibility of a bilateral free trade agreement, the Australian trade minister said Friday.
"The study will examine the potential gains for both countries, in particular the impact a comprehensive and genuinely liberalizing FTA could have on promoting economic growth, trade in goods and services, investment and other commercial linkages," Trade Minister Warren Truss said in a statement.
"India is emerging as one of the key drivers for global economic growth and its economic rise will be increasingly critical to world economic development," he added.
The Australian government will initially hold bilateral meetings with India to discuss the study's terms of reference, he said.
The FTA feasibility study will commence in late 2007 and is expected to be completed in 2009, he said.
Australia already has a free trade pact with the United States and is negotiating similar pacts with major trading partners China and Japan.
Among smaller trade partners, Australia also has free trade accords with Singapore and Thailand.
Australia's two-way trade in goods with India reached 11.4 billion Australian dollars (US$9.4 billion;