India-ASEAN FTA talks conclude – deal to be signed in December at ASEAN’s bangkok summit.
Kamal Nath and the Singapore trade minister announced the successful end of the talks in Singpore today. Read more here. Some facts:
Total trade between the 10-member ASEAN and India amounted to 37 billion US dollars in 2007, up 29 percent from the previous year.
India is seventh on the list of ASEAN’s biggest trading partners, trailing Australia, South Korea, China and others, according to ASEAN figures.
The FTA covers only goods, but talks are expected to follow on a services and investment agreement.
The Business Standard reports on the renewed urgency that the Geneva Doha failure of July lent to these talks being finally concluded after having been delayed. It also has more information on what the deal contains:
India, on its part, has agreed to lower import duties on nearly 96 per cent of the items it trades with Asean, while protecting nearly 490 highly sensitive products in the agriculture, textile and chemicals sectors. Asean, too, has shown ample flexibility in accepting some Indian positions though it had, in the last annual India-Asean summit in Singapore in November, virtually ruled out further negotiations until India came up with substantially better offers. Most of the group’s members were unwilling to allow protection for over 400 items and especially not to the ones of interest to them in agriculture as well textile and chemicals. These included, besides palm oil, items like pepper, tea and coffee. However, all that is past, though in the process Asean has also got concessions from India to shield its turf when it comes to automobiles and steel. In the case of the almost intractable issue of duties on palm oil and its derivatives, equally critical for a major importer like India as it is for exporters like Malaysia and Indonesia, the two sides have agreed to follow a middle path, agreeing to a tariff ceiling of 37.5 per cent for crude palm oil and 45 per cent on its refined version. In the event, this turned out to be the clinching point for the pact.
Is the future an Asian common market, with Asean already having signed agreements with South Korea, China and Japan, and negotiating with Australia and New Zealand?
Is India-ASEAN FTA a political compulsion or is really beneficial in terms of trade figures, especially when India’s adverse balance of trade (BoP) with Asean for the period 2005-06 to 2007-07 saw a rise from $472 million to $5.5 billion. This was due to rise in imports from Brunei, Malaysia, Indonesia and Singapore.
Archana
September 12, 2008 at 5:58 pm
Archana – What would the political compulsion be?
indiathewto
September 12, 2008 at 6:19 pm