Singapore, Aug 28 (Xinhua) The Association of Southeast Asian Nations (ASEAN) has concluded a free trade agreement in goods with India as the first step toward the establishment of a free trade area (FTA) by 2016. India’s Minister for Commerce and Industry Kamal Nath and Singapore’s Industry Minister Lim Hng Kiang at a news conference here Thursday announced the deal, which is expected to be signed at the grouping’s Bangkok summit in December.

Nath expressed his “deep satisfaction” at the conclusion of the deal, saying “it is an important milestone for our region”.

ASEAN-India trade has reached $30 billion and both sides have set a target of $50 billion by 2010.

ASEAN’s exports to India during 2005-2007 grew at an annual rate of 31 percent, the fastest among ASEAN’s exports to major trading partners.

“ASEAN-India trade accounts for only two percent of ASEAN’s global trade, so the potential of bilateral economic cooperation is profound,” said Nath.

The trade-in-goods agreement is the first step towards the establishment of a free trade area (FTA) among ASEAN members Brunei, Indonesia, Malaysia, Singapore, Thailand, on one hand, and India, on the other, by 2011 and with the remaining five ASEAN countries by 2016.

The other two steps - negotiations on services and investment - will begin “as soon as possible when the ASEAN countries are ready” and are expected to be completed by 2009, Nath said.

Under the deal, ASEAN companies will benefit from enhanced market access in India, according to a joint statement.

The agreement provides for tariff reduction for five items - crude and refined palm oil, coffee, pepper and tea - which are the key export goods of some ASEAN members.

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.