The agreement called the Mutual Legal Assistance Treaty was proposed by India at the summit of the eight-member South Asian Association for Regional Cooperation, or SAARC, which opened Tuesday in New Delhi, reports the Press Trust of India.
The PTI report said most members of SAARC supported the extradition provision as an anti-terrorism mechanism.
"This is an issue which we have discussed with Pakistan and other neighboring countries for years. Obviously we don't have identical views on it," India's Foreign Secretary Shivshankar Menon told reporters.
The report said Pakistan's stand is that an extradition arrangement should be on a bilateral basis rather than at a multilateral level under a regional forum.
Menon said Sri Lanka has offered to host a meeting to try to work out a reconciliation of the issue.
SAARC, founded in 1985, includes Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka, making it the world's largest regional economic organization covering a total population of 1.47 billion people. Afghanistan is the latest member country to join the grouping and will be formally accepted as a member at the two-day New Delhi summit.
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