India and Australia might enter a free trade pact by the end of the year that will consider sectors like dairy and wine.

Canberra seeks to increase market access for its dairy products in India as dairy is one of its strongest sectors. However, the Indian dairy industry is not eager as it does not have an expertise in the sector.

A source familiar with the matter was quoted by the Indian Express as saying: "There are concerns on agriculture and the services sector.

"Further, there is asymmetry in the level of ambitions of the two nations.

The two countries are expected to begin eighth rounds of talks regarding the pact in the first week of July. The first round of talks for economic cooperation agreement was held four years ago.

In the latest discussion, the countries will focus on market access for goods, services and investment, rules of origin, customs procedures and trade facilitation.

The Economic Times quoted Australia foreign minister Julie Bishop as saying: "The free trade pact is important to us.

"It is the next milestone in the relationship so we are hoping that it will be concluded by the end of this year."