Southeast Asian nations have concluded a deal for free trade in goods with India, ministers said Thursday, in a development hailed as a key regional milestone after hard negotiations.
The agreement between the Association of Southeast Asian Nations (Asean) and India, its seventh-largest trading partner, covers billions of dollars in trade and a market of 1.7 billion people.
Singapore's Minister for Trade and Industry Lim Hng Kiang and India's Minister for Commerce and Industry Kamal Nath announced the deal during an Asean meeting in the city-state.
Nath expressed India's "deep satisfaction" at the conclusion of the pact, which followed six years of talks.
"This is an important milestone for our region," he said.
Asean and India have set a target for total trade to reach 50 billion US dollars by 2010 from 38 billion dollars currently, Nath added.
The Southeast Asian bloc of about 550 million people is forging free trade pacts with key regional economies, including China and India, to ensure it does not become economically sidelined.
Asean itself aims to achieve a single market and manufacturing base by 2015.
Senior officials agreed on the Asean-India pact earlier this month during a meeting in Brunei, but it was only sealed this week at the Singapore meetings.
The deal is to be signed at Asean's Bangkok summit in December. It covers contentious products like crude and refined palm oil, coffee, pepper and tea, but also excludes 489 items from tariff cuts.
Lim said the excluded items represent five percent of annual trade value and are "not a very significant number."
The agreement was supposed to have been concluded last year, but talks became bogged down by differences over products that India wanted excluded from tariff cuts.
New Delhi had submitted a list of 1,414 products, while Asean's target number was 400.
India adopted a free-market economy in the early 1990s and was keen to expand trade ties with Asean, but it also wanted to protect sensitive sectors such as agriculture and textiles, which provide livelihoods for millions.
"It took a long time understanding the sensitivities of all the countries within the Asean and for the Asean countries to understand India's sensitivities," Nath said.
Lim, the Singapore trade minister, said it was not easy for India to deal with Asean's 10 diverse states, but "respecting our sensitivities and exercising flexibility" sealed the deal.
Nath said India's trade with Asean is 9.6 percent of his country's global trade, while trade with India is only two percent of Asean's global trade.
Asean, Australia and New Zealand also announced Thursday that they had concluded talks on comprehensive free trade deals.