India, Canada to launch negotiations for free-trade pact

Meeting on the sidelines of the fifth G-20 Summit here, Singh and Harper also discussed the entire gamut of bilateral ties, which have seen a significant development in the past couple of years.

"The free trade agreement would be of enormous benefit for both the countries, particularly for the Indo-Canadian business community," Harper said after the meeting.

Describing the decision to launch negotiations for the pact as a "key milestone" in bilateral relationship, Harper said it demonstrates the increasing cooperation between the two countries.

"It is a historic step. We look forward to working hard and coming to successful and conclusive negotiations as soon as possible," he said.

Singh said the two countries have taken "momentous decisions" to bring themselves close to each other to widen and deepen bilateral relationship especially after Harper's visit to India in 2009 and his trip to Canada in June this year.

"The landmark agreement on cooperation in civil nuclear energy is one indication of the sea change in the relationship between the two countries," the Indian Prime Minister said.

Bilateral trade between the two countries totalled 4.2-billion dollars, with Canada primarily exporting vegetables, fertilisers, machinery and wood pulp.

The main imports from India are organic chemicals, knit and woven apparel, precious stones and metals, electronics and machinery.

India has free-trade agreements with ASEAN and other groupings.