Surayud Chulanont, named premier after Thailand's military ousted Thaksin Shinwatra in September, arrived in New Delhi late Monday on a three-day visit.

"Our two countries are on track to conclude a free trade agreement in the near future with a view to establishing the FTA covering trade in goods by 2010," Surayud told a business meeting in New Delhi.

The India-Thai talks on free trade were launched during a visit by Indian Prime Minister Manmohan Singh to Thailand last year and prior to the coup, but progress has been slow.

With Thailand's economy slowing due to political instability, Surayud has been looking for ways -- including bilateral free trade deals -- to keep crucial exports growing.

Surayud, who was also lined up for talks with Singh Tuesday, also invited Indian investment in the information technology and pharmaceutical sectors.

Indian Trade Minister Kamal Nath said negotiations on the free trade deal in goods would commence in July and that an agreement was likely to be signed by September.

"The two sides have also agreed to start parallel negotiations on services and investment parts of the FTA," Nath said.

India is Thailand's largest trade partner in South Asia, with trade worth 3.4 billion dollars last year, when Thailand enjoyed a surplus of 200 million dollars on shipments worth 1.8 billion dollars to India.

Although far lower than bilateral trade with China, which totalled 25.1 billion dollars last year, Thailand believes India could counterbalance China's growing economic might.