India-Thailand free trade agreement talks move ahead

Economic Times | 9 Sep, 2013

India-Thailand free trade agreement talks move ahead

By Dilasha Seth, ET Bureau

NEW DELHI: Thailand has indicated softening of stance on some of the issues in the freetrade agreement it is negotiating with India, bringing the pact closer to reality after more than 10 years of talks.

Top officials in the ministry of commerce and industry said Bangkok has shown more flexibility recently over some of the demands raised by Delhi, including granting more access to Indian professionals.

"We should expect something by the end of this year," a senior officer with the commerce department told ET. "Negotiations are still on. After the prime minister’s visit in May, Thailand has become less resistant to our ideas and seems to be ceding on the access that we want."

In 2012-13, India exported $3.7 billion worth of goods to Thailand against imports worth $5.1 billion. India has been demanding greater access under Mode 4 of trade in services, which is related to the movement of professionals. In Thailand, a large number of services like engineering, accounting, legal and architecture are reserved for Thai nationals.

For other professionals, Thailand has a restrictive visa policy. India has also been pushing Thailand to sign the mutual recognition agreement, which will do away with the need for Indian professionals to secure additional qualifications from Thailand before being allowed to work there under Mode 4 movements.

"It will make sense for India to sign the deal only if we get mutual recognition agreement," said an expert.

Thailand also requires medical professionals to secure a licence from the Thai Medical Council, which conducts its examination in Thai, making it difficult for foreign practitioners to clear the exam. Thailand, on the other hand, has been asking for freer movement of Thai spa workers, but India is hesitant as it might lead to an influx of semi-skilled workforce into the country.

India only allows professionals with a minimum salary of $25,000 per annum (about Rs 16 lakh at current exchange rate), which Bangkok views as very high. Thailand says it is seeking entry of only those spa workers who have a minimum training and have cleared basic English language test.

"Thailand is very particular on specialized categories-—those who know English and have done training for a particular number of days. India can, however, put a limit to the number of Thai spa workers working in India in a year. This should work fine," said Arpita Mukherjee, professor at Icrier, a Delhi-based non-profit research organisation.

India and Thailand had signed an early harvest agreement in 2004 to set the ground for the proposed FTA. The 2004 pact led to near-zero customs duty on 82 items of trade between the two nations.

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source: Economic Times