India and the 10-nation Association of Southeast Asian Nations have concluded six years of negotiations for a free-trade agreement aimed at creating a single market.

Kamal Nath, India’s commerce and industry minister, described the new pact as a “key regional milestone” comparable in structure to the European Union. The deal will be formally signed in December during the India-ASEAN summit in Bangkok.

“The countries of East Asia are important drivers of growth ... with large consumption to drive global economies,” Nath told a joint press conference of India-ASEAN economic ministers.

The agreement covers combined markets of 1.5 billion people.

The pact will eliminate import duties on 71 percent of products by Dec. 31, 2012, and on another 9 percent by 2015. Duties on 8 to 10 percent of products that will remain on the “sensitive” list will drop to 5 percent.

Bilateral trade between India and ASEAN annually amounts to about $38 billion and is expected to reach $50 billion by 2010.

The deal was reached after India and Indonesia agreed to a compromise on palm oil trade, which was the last remaining obstacle.

In related news, ASEAN announced that it has reached a tentative agreement with Australia and New Zealand regarding a comprehensive free-trade pact.

In their joint statement, the countries did not spell out the terms of the pact, and added “a small number of bilateral market access issues” still need to be resolved.

Each country must also approve the agreement before it can be signed in December.