EFTA Secretary General Kaare Bryn stressed however that the four-nation bloc -- comprising Norway, Iceland, Switzerland and Liechtenstein -- remains firmly committed to the multilateral trading framework.

"It must be absolutely clear, no shadow of a doubt, that for the EFTA countries, the multilateral trading framework is the most important... we are not in competition with the WTO," Bryn told journalists at a presentation of EFTA's 2006 report.

EFTA held a ministerial meeting with Indian trade minister Kamal Nath last December, and signed a memorandum of understanding to evaluate a possible free trade agreement between the bloc and New Delhi.

"The potential in Indian markets is of course enormous," Bryn said.

Bryn added that he was "fairly optimistic" the groundwork would be in place by the end of the year, so both sides could take a political decision on whether to start fully-fledged negotiations.

On China, Bryn said that Beijing had expressed a preference at the current stage for bilateral negotiations with Norway and Iceland, rather than talks with EFTA as a whole.

Bryn noted that EFTA was often able to go further than the WTO when negotiating trade deals, notably on the contentious issue of agriculture.

Each EFTA country negotiates a separate agriculture protocol, which means the overall deal is not restricted by a lowest common denominator, he said.

EFTA currently has fifteen free trade agreements with 19 different partner countries around the world, from Chile and Mexico in Latin America, to the Southern African Customs Union of South Africa, Botswana, Namibia, Lesotho and Swaziland.

The European Union remains EFTA's dominant trading partner, accounting for around 72 percent of all trade, Bryn said.

The WTO's Doha round of trade negotiations are mired in an impasse, with developing countries seeking greater market access in the West, while developed countries call for lower import tarriffs and subsidies.