KUALA LUMPUR, Aug 24: Southeast Asian nations and India said on Thursday they had agreed to resume stalled free trade talks, although Malaysia indicated that several prickly issues remain in dispute.

Malaysia's Trade Minister Rafidah Aziz said India and the Association of Southeast Asian Nations (Asean) had managed to hammer out a basic starting point to pick up suspended talks for a free trade agreement (FTA).

We have agreed to resume negotiations as soon as possible with Malaysia leading the negotiations on behalf of Asean, Rafidah told reporters at a press conference with her Indian counterpart Kamal Nath.

Ministers identified key areas that needed to be addressed for the negotiations to move forward. These were key areas that in the past brought about a standstill, said Rafidah, who is chairing Asean economic talks here.

Negotiations to forge an FTA stalled after India issued a long exclusion list of 1,414 products which would see a range of Asean exports excluded from tariff reductions.

Nath hailed the decision and the potential for trade with Asean, saying the parties had to move ahead with the FTA.

There is increased trade between India and Asean and we are all desirous that this be given a new momentum in the shape of an FTA, he said.

Rafidah said India had submitted a revised list which reclassified products for tariff reduction over different timeframes stretching years ahead.

India has reduced to a number of 560 products. That's a good sign, she said, although adding India's timetable for reducing tariffs was too slow.

She said India had permanently excluded some products of interest to Asean, including ceramics, wooden furniture and agricultural products, and criticised India's proposal to reduce tariffs on palm oil products over 16 years.

Palm oil and palm oil products have been removed from the original standstill list, but cuts will only reach 50 to 60 per cent in 2022, she said.

Is 2022 a reasonable time frame for palm oil tariffs to be cut? We think that it should be advanced further.Despite India's concessions, Asean's secretary-general Ong Keng Yong indicated the grouping was reserving its opinion.

We cannot say we are satisfied, because we just agreed that we will go back to the negotiating table and look at this all together, he said at the press conference.

But Rafidah, who has been vocal in her criticisms of India's concessions, signalled a tough stance on future negotiations.

When reporters asked Nath if India would make more concessions, Rafidah jumped in with: They have to, otherwise we will be at a standstill.I will heed Rafidah's advice in mind in deciding how we should run the country, Nath shot back.

The Malaysian minister said officials would proceed with negotiations on liberalising trade in services and investment once trade in goods had been resolved, but would not give a deadline for the completion of negotiations.

India, which adopted a free market economy in the early 1990s, is keen to expand trade ties with Asean, but wants to protect its own sensitive sectors, such as agriculture and textile which provide livelihoods to millions of Indians.

The trade pact is scheduled to come into force on January 1, 2007.—AFP