Asean FTA in deep freeze
India and Association of South - East Asian Nations (Asean) will have to reschedule
the June 1 deadline for eliminating duties on more than 4,000 products traded
between the two sides, a government official said.
India is not ready to sign the deal as per the proposed free trade agreement (FTA) in
April due to the upcoming Union elections, the official, who didn’t wish to be named,
said.
The implementation of tariff cuts will now be postponed by more than a month
depending on when the new government decides to sign the agreement, he said.
The FTA provides elimination of tariffs on 80% (about 4,000 items) of traded
products, both agricultural and industrial, like consumer electronics, a range of farm
products, metals and chemicals, in a phased manner by 2015. For about 10% (500
items) of additional products that have been placed on the sensitive track, the tariffs
will not be eliminated but brought down to 5%. India has 489 items, mostly farm
products, on the negative list which will not be subject to tariff cuts.
"Since the new government will be in place in June, it will not be ready to take a call
on such agreements before July as it will need at least one month to settle down.
Although the India - Asean FTA has more or less been finalised and just needs to be
signed by the two sides, it will not be possible to stick to the June 1 schedule for
implementing tariff cuts," the official said.
The FTA, which was to be signed late last year, could not be ratified because of
political problems in Thailand, one of the 10 members of the Asean group. The other
Asean countries are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the
Philippines, Singapore, and Vietnam.
It was then decided that the agreement would be signed at the Asean summit in the
last week of February 2009. However, as the meet was not at the Prime Ministerial
level, the government deferred the signing to April when the India - Asean summit is
scheduled. Since the elections are due in May, it was finally decided by the UPA that
the agreement should not be signed so close to the elections. The fate of the pact
will, therefore, be sealed after the elections.
Source: The Economic Times
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