Bangkok, Aug 13 - India and the 10-member Association of South East Asian Nations (ASEAN) Thursday signed a major economic pact after six years of talks, hoping to widen the access to their respective markets of 1.7 billion people and push bilateral trade beyond the current level of $40 billion.

The Free Trade Agreement was signed here by Commerce Minister Anand Sharma and his counterparts from the ASEAN member-countries, and comes into force from Jan 1 next year.

'The agreement is a well balanced one, it is very much in harmony with our country's 'Look East Policy',' Sharma said after the signing ceremony, which was planned earlier this year but postponed because of civil disturbances in the country.

To be implemented in phases, the pact calls for eliminating duties on some 4,000 items by 2016 to cover 80 percent of India's imports from the 10 countries - which had become a major sore point especially for states producing cash crops like jute and tea.

Prime Minister Manmohan Singh had set up a group of ministers to allay domestic concerns before reaching the pact.