Commerce Minister Kamal Nath Monday said India will target bilateral trade worth $10 billion per annum with Malaysia within the next three years against the present level of $3.5 billion.

Addressing a conference here, Kamal Nath said a rapid expansion of bilateral trade had resulted in Malaysia becoming India's largest trade partner among member countries of the Association of South-East Asian Nations (ASEAN).

The commerce minister also invited foreign direct investment (FDI) from Malaysia to expand economic ties between the two countries and said India had no restrictions on accepting overseas capital in most sectors, according to an official statement issued here.

India does not impose restrictions on the repatriation of investment or profits either, he told the Malaysia-India Economic Conference 2005 organised by the National Small and Medium Industry Consultative Centre (Nasmic).

About 1,800 business delegates from Malaysia and 150 businessmen of Indian origin are participating in the conference, mainly from the small and medium enterprises.

Kamal Nath referred to changes made in the rules governing fresh investment proposals from foreign companies that already have joint ventures and technical collaborations in India.

"We have only last week substantially modified the provisions of Press Note 18 to make crystal clear our intentions to encourage investment," he said, adding India's investment policy was among the most liberal in the developing world.

The minister said he would be introducing a bill on special economic zones in the next session of parliament and the new legislation would incorporate biotechnology parks, free trade areas and warehousing zones.

"In all these, FDI up to 100 percent would be permitted, including in real estate development," he said, adding that these zones will be designated as foreign territory for the extension of tax preferences.