The India-ASEAN free trade agreement is expected to be finalised mid 2007. This was stated by commerce minister Kamal Nath on the conclusion of talks with leaders of the ASEAN at the resort island Cebu in The Philipines.

The two sides have agreed to prepare a list of products that would not be exempt from tariff cuts till 2022. The traded value of these duty exempt products would not exceed 5 per cent of the total tradeable goods on which duties would be eliminated or reduced.

India is expected to bring into this list some 490 items that include rubber and coconut. ASEAN would also have its own sensitive list.

The least cuts in duties would come on four items — crude palm oil, refined palm oil, pepper and tea — which both sides regard as highly sensitive, and the duties on these will be brought down to 50 per cent by 2022.

On these goods, India says the duty reductions will commence only after five years, but ASEAN wants an earlier date.

The ''sensitive'' items list, which comprise another 700 items, including many engineering and chemical products, the duties will fall to between zero and 5 per cent by 2018.

On all the other goods import duties will be reduced from the date the agreement is signed. India will bring these down to zero by 2011 for less developed countries in the ASEAN and by 2015 for the other countries.

While India and ASEAN grappled with the terms of the FTA, China signed an agreement on trade and services with ASEAN that will be effective from July, enabling greater flow of services such as telecom, banking and construction.

ASEAN countries and China would provide national status to investors in the region.

China says trade agreement with ASEAN will benefit both sides China says that the signing of the agreement with ASEAN on trade in services is a major step forward in building the China-ASEAN free trade area which will benefit both sides.

The China-ASEAN FTA could lead to the creation of the world''s third-largest free trade area.

The signing was another major achievement in China-ASEAN economic cooperation and trade, the spokesperson said, adding it has laid the foundation for the completion of the Govt says cooking gas, kerosene subsidies to stay.