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China is considering the possibility of establishing a free trade area (FTA) with India, a senior official with the Ministry of Commerce has said.

"Following the reopening of the trade post on the Indian-Chinese border, our government is considering FTA talks with India," assistant minister of commerce Fu Ziying said at the weekend at the 2007 China Industrial Development Forum in Beijing.

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"We have to follow economic globalization trends and push for the liberalization and facilitation of trade," he said.

China is currently holding FTA talks with Singapore, Australia, New Zealand and Pakistan as well as the Association of Southeast Asian Nations (ASEAN).

With a combined population of 1.7 billion, the China-ASEAN FTA will be the biggest FTA in the world when it becomes operational in 2010.

A FTA between China and India, the world's most and second most populous nations, would benefit as many as 2.4 billion people.

Trade between the two Asian giants, both among the world's fastest growing economies, has expanded quickly in recent years.

Bilateral trade surged 37.5 percent to reach US$18.73 billion in 2005. It is expected to hit US$20 billion this year.

As a symbol of their closer trade ties, the two countries reopened cross-border trade at the Himalayan Nathu La Pass last July, 44 years after trade ended in the wake of a short border war between them.

China and India agreed in September to create a Cabinet-level body to promote joint technology development and said they would sign a final agreement during Chinese President Hu Jintao's visit to New Delhi.