Asean FTA in deep freeze
Economic Times, India
Asean FTA in deep freeze
24 Mar 2009
By Amiti Sen, ET Bureau
NEW DELHI: 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.
