Wellington  - New Zealand and India hope to start negotiating a free trade pact early next year, it was announced on Friday following ministerial talks in Wellington.

New Zealand Trade Minister Phil Goff said after meeting Indian Commerce Minister Kamal Nath that both hoped a round of preliminary discussions could be concluded this year allowing negotiations to start soon after.

Goff said they agreed that while bilateral trade had grown strongly to be worth 630 million New Zealand dollars (about 491 million US dollars) a year, this was well below the potential.

He pointed out that New Zealand's trade with China was now worth 7.5 billion New Zealand dollars and would grow rapidly following the free trade pact signed recently.

Goff said the agreement would not only include tariff rates, which were very high for New Zealand agricultural exports to India, but technical barriers to trade, health and customs restrictions.

"With food shortages in key commodity areas like dairy rights across the world, including in India, now is a good time to address how we can cooperate more in trade in these areas," he said.

Nath was accompanied to New Zealand by a large delegation of Indian businessmen who have had meetings with counterparts in Auckland and Christchurch. (dpa)