India and China on Monday agreed to explore the possibility of starting talks on a regional trade pact as the world's two fastest growing economies seek to enhance commerce to 60 billion dollars by 2010.

"Against the backdrop of accelerating regional economic integration in Asia, the two sides agree to explore the possibility of commencing discussions on a mutually beneficial and high-quality regional trading arrangement that meets the common aspirations of both countries and will also benefit the region," according to a declaration issued after a meeting of Prime Minister Manmohan Singh and Chinese premier Wen Jiabao.

The joint statement welcomed the conclusion of the feasibility study on the RTA between the two countries that said such an agreement would be mutually beneficial.

"As major economies in their region, the two sides believe that the strong growth in their trade and economic relations is mutually beneficial," it said.

Earlier, Singh urged China to lift market barriers to goods from India and wanted Indian business to diversify its export basket to that country.

India had a deficit of US$ 9 billion last year in its trade with China. The two countries have agreed to increase bilateral trade from US $ 40 billion to US $60 billion by 2010, after Singh's summit meeting with his counterpart.

"I would urge Indian business to vigorously pursue opportunities for expanding non-traditional items of export. Such efforts, when matched by greater market access for Indian goods in China, will help to bridge the rising trade deficit between us," Singh said at the India-China Economic, Trade and Investment Summit in Beijing.