India and the European Free Trade Association (EFTA) established a joint study group to explore the possibility of entering into a broad-based trade and investment accord, an official statement here said.

The study will examine all aspects of existing bilateral economic relationship with EFTA, which also includes Iceland and Liechtenstein, and suggests steps for deepening the economic engagement through expansion of two-way trade and investment flows, the statement said.

The bilateral trade and investment will cover trade in goods and services, investment, trade facilitation, technical standards, intellectual property rights and dispute settlement, it said. The study group has been asked to submit its report within a year and its first meeting will be held in February next year, the report added.

The agreement to set up the study group was signed in presence of Indian Commerce Minister Kamal Nath and Doris Leuthard, federal counsellor of Federal Department of Economic Affairs of Switzerland.

The statement says there are strong complementarities between India and the EFTA and harnessing them "will widen and deepen our trade basket. The strong technology orientation of the EFTA countries can be gainfully used along with huge skilled human resources base of India for the benefit of both sides", it added.

India's strength lies in services sector and the large service-consuming economies of EFTA provide an ideal situation for increasing trade flows.

Bilateral trade between India and EFTA, which was formed in 1960, grew at 9.3 percent at $7.4 billion in 2005-06.