"We are on the verge of entering into one (FTA) with Asean next month," he told the World Economic Forum meeting on Tuesday evening.

"I am certain that in the next few years we may see the rise of a major free trade area in Asia", he said adding that this would cover all major Asian economies including China, Japan, South Korea and possibly extending to Australia and New Zealand.

This pan-Asian FTA could be the third pole of the world economy after the European Union and North American free trade area and would open up new growth avenues for Indian economy, Singh said.

In addition to the pro-active role in WTO, where India was attempting to dismantle barriers to farm trade, the country is actively pursuing regional trade arrangements and concluded FTAs within Saarc and with Singapore as well as Thailand, Singh pointed out.

Asserting that tariff levels in India were coming down, he said the government was committed to bringing them further down to Asean levels.

Singh is slated to participate in the India-Asean Summit in the second week of December.

The prime minister's Trade and Economic Relations Committee cleared on Monday the negotiating guidelines for India-Asean FTA. These guidelines will define India's strategy at the next meeting of trade negotiating committee for finalisation of the FTA, which is scheduled to meet on December 1-2.

Asserting that the FDI regime was liberal, the Indian prime minister said a group of ministers was examining ways of further rationalising the current FDI regime to cut red tape.

Barring the financial, retailing and coal mining sectors, India was extremely liberal in welcoming FDI, he said, adding that in retail "we are engaged in an intellectually stimulating exercise to understand the possibilities that exist in opening up this sector and how best we can harness it for our needs."

"Our ability to create bureaucratic hurdles in the way of enterprises amazes me. I think as far as FDI is concerned, it is not policy but badly designed procedures and poor infrastructure which are a constraint," he said.

Singh projected a 7.5 percent growth of Indian economy for this year and promised to take it to 10 percent in the next two to three years.

He said a ten percent growth was "eminently feasible if we have the expected increase in savings rate arising out of a young work force and make a quantum leap in growth rate in agriculture, industry and services."

Singh emphasised on the need to engage in infrastructure development including ports, airports, railways and power particularly in villages through greater public-private sector partnership.

Meanwhile, Finance Minister P Chidambaram urged investors from Japan to put their money in Indian infrastructure sector. He said Japanese investment in India was lower compared to that in China.