India clinches Asean FTA

by Dave

Business Standard

Consumers can expect duty-free imports of a range of products like capital goods, some textiles, electronic goods and chemicals from next year after India successfully concluded negotiations on a Free Trade Agreement (FTA) for goods with the 10-member Association of Southeast Asian Nations (Asean) in Singapore today.

The formal pact will be signed this December at the India-Asean summit at Bangkok, which is expected to be attended by Prime Minister Manmohan Singh.

The breakthrough comes after six years of negotiations for the trade pact, which is expected to add $12 billion by 2010 to trade between the participating nations.

* Reduces tariffs to zero in over 4,000 goods out of 5,000 that are traded. To be done in a phased manner over six years
* Partial reduction in import tariffs on highly sensitive farm goods. Tea, coffee — 45%, pepper — 50%, crude palm oil — 37.5%, refined palm oil — 45%
* Sensitive list of goods with partial duty cuts — 606 items, (Agricultural — 16, Textile — 304, Machinery & auto — 60, chemicals & plastic — 226)
* Negative list with no duty cuts — 489 items. (Agricultural — 302, Textile — 81, Machinery & auto — 52, chemicals & plastic — 32, Others — 22)
* Operational from Jan 1, 2009, Deal to be signed in December, 2008 at Bangkok
* Bilateral Trade (Apr-Feb 07-08) — $34.38 billion which is 9.59% of India’s global trade
* Exports — $14.02 billion, Imports — $20.36 billion

Today, a joint statement issued after a meeting of trade ministers from
India and key Asean members said the agreement will facilitate the
creation of an open market for 1.7 billion people with a combined gross
domestic product of $2.4 trillion.