An Asian free-trade agreement between India and three key countries of the Association of South East Asian Nations (ASEAN), Singapore, Thailand and Malaysia as also a comprehensive economic partnership agreement with South Korea came into effect today.

Under the FTA, the parties will slash import duties on several products like seafood, chemicals and apparels among others.

China has also concluded a free-trade agreement with the ASEAN, which comes into effect today.

India and the ASEAN signed a free-trade agreement in August 2009, aimed at breaking duty barriers on goods traded. However, only Malaysia has ratified the agreement so far.

The FTA would result in elimination of tariffs on more than 4,000 products, ranging from electronic goods and textiles to chemicals and capital goods over six years.

Bilateral trade between India and the 10-member ASEAN now stands at $48 billion annually.

Other ASEAN countries such as Brunei, Thailand and Singapore are expected to ratify the pact soon.

India has, meanwhile, lined up a series of meetings with the ASEAN members over the next seven months to reach a deal on opening up services trade, after signing an agreement to liberalise merchandise commerce.

Negotiators are expected to meet in New Delhi from January 12 to 16 to take forward the talks on services trade, a senior commerce ministry official said, adding that more interactions are scheduled for March, April, May and July.

So far, two rounds of negotiations have already taken place in this regard.

ASEAN-China FTA

The FTA between China and the ASEAN also kicked off today, creating the world's largest free trade area embracing developing countries. The China-ASEAN FTA covers a population of 1.9 billion and involves about $4.5 trillion of trade volume.

The trade pact is expected to boost bilateral trade by $106 billion by lifting tariffs on some 7,000 items, 90 per cent of all traded commodities.

China, which is likely to overtake Japan as the world's second largest economy this year, and six founding ASEAN members such as Singapore and Thailand eliminated tariffs on about 90 per cent of products.

Four other members such as Vietnam will gradually lower tariffs down to zero in 2015.

Bilateral trade between China and the 10 ASEAN members grew from some $100 billion in 2004 to $231 billion last year, averaging a 14 per cent annual growth rate.

ASEAN secretary-general Surin Pitsuwan said the FTA would benefit both sides, given the rising purchase power of their growing middle class populations, reported the Xinhua news agency.

"Middle class of China is expanding, which will be good for ASEAN products. Middle class of ASEAN is growing, expanding, which will be good for Chinese export and Chinese services," Xinhua quoted Surin as saying.