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FTA with ASEAN to eliminate duties on 80% of traded goods

13 Aug

Business.jpgNEW DELHI : In a major success in its `Look East’ policy, India on Thursday signed a Free Trade Agreement (FTA) with the 10-member Association of South East Asian Nation (ASEAN) bloc that would eventually eliminate duty on 80% of the goods traded at present. The two sides have set an ambitious target of achieving an increase of $10 billion worth of trade in the first year after the agreement comes into force from January 2010. India’s current bilateral trade with the ASEAN bloc is worth $40 billion. The agreement was signed by commerce and industry minister Anand Sharma and economic ministers of ASEAN in Bangkok. Considered as a major breakthrough, the pact comes after six years of intense negotiations. The FTA would bring down tariffs on electronics, chemicals, machinery and textile goods, according to a commerce ministry statement. Interestingly, talks on software and information technology services have been postponed for December 2009. This is one area where Indian exporters of services could have brought in good business and also offset setbacks received in the European and US markets during the downturn. Of the total $936 billion worth of ASEAN imports, services import account for $180 billion which is the primary focus of Indian industry. ASEAN comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Lobbying from domestic industry has led to India excluding 489 items from the list of tariff concessions and 590 items from the list of tariff elimination to address sensitivities in agriculture, textiles, auto, chemicals, crude and refined palm oil, coffee, tea, pepper, etc. Industry was quite upbeat about the conclusion of the agreement. “Our most sensitive and vulnerable sectors are protected in terms of the negative list and sensitive list,” said FICCI secretary general Amit Mitra who accompanied the commerce minister to Bangkok and was present during the concludion of the FTA. Palm oil, tea, coffee and pepper are put under the highly sensitive list and import duties on them will be lowered to around 40%-45% by 2019. Several products in areas like agri-commodities, auto components, textiles, plastics and chemicals have been safeguarded through India’s negative list on which there will be no tariff reduction, Mitra added. In addition, products in the sensitive list will be subjected to tariff reduction over a relatively longer period, he said. Source:http://timesofindia.indiatimes.com

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Posted by on August 13, 2009 in Business

 

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