Indonesia will go ahead with the implementation of another free trade agreement with India despite strong opposition from local industries about a similar trade deal with China early this year, trade minister Mari Elka Pangestu said in Jakarta last week.

She said that together with other ASEAN countries, Indonesia would implement the free trade agreement with India to take advantage of India's massive local market.

Mari said that Indonesia would fully implement the ASEAN-India FTA (AIFTA) on 1 June and was also scheduled to implement similar trade deals with South Korea, Australia and New Zealand.

Her comments come as officials from India and the 10 South East Asian nations prepare to meet in New Delhi next month to speed up the ongoing talks for opening trade in services, an area of immense interest for Indian professionals.

The two sides aim at entering the market opening pact in the services sector by August, a commerce ministry official said on Saturday.

India and the ASEAN signed a free trade agreement (FTA) in goods in August last year and are engaged in intense negotiations to expand this pact to include services and investments.

"We should take up the opportunities to benefit from the implementation of the agreements," Pangestu told The Jakarta Post on Thursday. She said the free trade agreement with India would benefit Indonesia's CPO producers.

"India is now imposing import tariffs of up to 80 per cent on Indonesian CPO products. Fortunately, we have been successful in negotiations with India to gradually decrease the tariffs after the implementation of the agreement," she said.

According to deputy trade minister Mahendra Siregar, without a free trade agreement with India, Indonesia would miss out on potential revenues of about $3 billion from CPO exports a year. Mahendra said it could lead to a potential loss of $8 billion if combined with other products.

"The loss might affect about 4.5 million farmers and workers in the CPO-related sector," he said.

India is Indonesia's fastest growing export destination after China.

Apart from CPO, Mari said, the AIFTA would potentially create benefits for other local products, such as textiles and clothing.

She said domestic products might have difficulties in competing with cheaper pharmaceutical and automotive products imported from India.

Based on ASEAN Secretariat data, the AIFTA market will cover 1.8 billion people in the two economies with a combined Gross Domestic Product (GDP) of $2.75 trillion. Indonesia is the fifth country in the region to ratify the agreement, after Malaysia, Singapore, Thailand and India, which implemented it on 1 January.

Head of the house of representatives' commission VI overseeing trade, industry and investment Airlangga Hartarto, told the Post last week the AIFTA actually provided less significant challenges than the ACFTA. India, he said, had cheaper automotive products and the Indonesian market had been "protected" by Japanese automotive brands.

Other superior commodities from India such as textiles, he said, would also face strong competition from Chinese products.

The ASEAN bloc that consists of Malaysia, Indonesia, Thailand, Laos, Cambodia, Brunei, Philippines, Myanmar, Singapore and Vietnam have been negotiating with India for a free trade agreement for over six years. It only materialized in August last year.

Total trade between India and ASEAN is around $40 billion, of which India's share in exports accounts for close 50 per cent. However India's share in ASEAN's total trade is less than 3 per cent.