Calling India "a natural candidate" for an expanded UN Security Council, Singapore Prime Minister Lee Hsien Loong Thursday offered to help New Delhi in forging closer economic ties with ASEAN.

Hailing the Comprehensive Economic Cooperation Agreement (CECA) he signed with Prime Minister Manmohan Singh Wednesday night, Lee told Indian business leaders the landmark pact would create more opportunities for both sides and deepen engagement with the Association of South East Asian Nations.

"It is a significant step towards an India-ASEAN free trade agreement, and deeper engagement with India and Southeast Asia," he told an interactive meeting organised by Federation of Indian Chambers of Commerce and Industry (FICCI), Confederation of Indian Industry (CII) and Associated Chambers of Commerce and Industry (Assocham).

"Singapore supports India's bid for a permanent seat in the UN Security Council. India is a natural candidate, given its size, the population it represents, its growing influence and linkages internationally," Lee said.

"Singapore-India trade, estimated to be about $7 billion, is already half of the total India-ASEAN trade. Singapore can therefore play a useful role as a pathfinder for India," he noted.

The CECA, which will come into effect Aug 1, is an integrated package comprising a free trade agreement, a bilateral agreement on investment promotion and protection, an improved double taxation avoidance agreement and a work programme for cooperation in healthcare, education, media and tourism.

Calling for bolstering India's ties with ASEAN, Lee said: "While Southeast Asia's trade with India is growing rapidly, it is still only 15 percent of its trade with China.

"The centrepiece of India-ASEAN cooperation is a free trade agreement, which will build a strong bridge across the two regions."

India's Commerce Minister Kamal Nath, speaking at the same event, said: "This is not only a historic milestone in bilateral ties but also a historic juncture in the solidarity of Asia reinforcing the fact that this century belongs to Asia."

Lee's remarks on closer engagement with India and ASEAN echoed those of Manmohan Singh, who has asked the Trade and Economic Relations Committee to prepare a blueprint for an India-ASEAN free trade pact.

In his banquet speech Wednesday night, Manmohan Singh thanked Lee for Singapore's critical role in facilitating Indian participation in the East Asia summit to be held in Kuala Lumpur in December.

Lee, who arrived here Tuesday on a three-day visit, also pushed for deeper engagement in air passenger services to boost the flow of tourists and business between the two countries.

Citing the example of China, he said: "Between Singapore and China, we now have unlimited flights. But between Singapore and India, travellers have great difficulty in getting air tickets. This puts India at a significant disadvantage."

The solution, according to him, is a liberal civil aviation regime.

An open skies pact was discussed by Manmohan Singh and Lee Wednesday night.

"The respective civil aviation ministries will now hold discussions next month to take the issue forward," Kamal Nath said after his meeting with Lee Thursday.

Lee also unveiled his vision of "an Asian renaissance" built around stability and free markets in the region, in which India's growing relationship with Singapore and Southeast Asia will play a critical role in creating a multilateral world order.

"The stage is set for an Asian renaissance. There are three important building blocks to this vision - first strengthening India's ties with Asia; second, evolving a stable, open regional architecture; and third, reaching consensus on globalisation and economic reforms," he said.

India's presence in the UN Security Council is crucial to this vision of Asia, Lee said.

Earlier Thursday, Lee met Leader of Opposition and Bharatiya Janata Party (BJP) leader L.K. Advani. He is slated to meet former prime minister Atal Bihari Vajpayee before leaving for Singapore Thursday evening.