logo logo

India to hold FTA plus talks with Customs Union troika

The Hindu, India

India to hold FTA plus talks with Customs Union troika

By Sandeep Dikshit

3 April 2013

India and the Customs Union of Russia, Belarus and Kazakhstan will hold talks for a free trade agreement plus in June this year, Commerce Minister Anand Sharma and Chairman of Board of the Eurasian Economic Commission Viktor Khristenko decided during their talks here on Tuesday.

The June meeting in St. Petersburg is likely to decide on preliminary spadework into all the aspects of an FTA plus or Comprehensive Economic Cooperation Agreement (CECA) that aims to cover trade in goods, service, investment and movement of labour, Mr. Khristenko told select newspersons on Tuesday after talks with Mr. Sharma.

“Both sides agreed to discuss the terms of reference for the joint study group, composition of joint study group and fixing the timeframes for the submission of the joint study group report in June 2013 when Mr. Sharma visits St. Petersburg for the International Economic Forum,” stated a Commerce Ministry release.

However, Mr. Khristenko would not hazard a guess about the eventual size of the present Customs Union of three republics of the former Soviet Union. This is an issue of much interest to the Indian side as it sets about getting into serious negotiations with the Russia-led troika.

“Who would have said in 1983 that the European Union will consist of 27 countries? At that time they would have predicted a maximum of 10 or 15 countries,” shot back Mr. Khristenko while warning that an FTA/CECA will not be an “easy process.”
Other nations in queue

Kazakhstan’s neighbour Kyrgyzstan is likely to be the fourth entrant and Tajikistan could over time be the fifth country to joint the Customs Union. Ukraine, Armenia and Moldovia would also be moving close to the Customs Union but for some time they are likely to be the first three countries outside the core. “They could be candidate members or observers,” said a member of Mr. Khristenko’s delegation which is here at the invitation of the Indian government.

The Russian official was at pains to draw attention to the enormity of the task by reminding that the European Union and India were still locked in negotiations after 17 rounds of talks and a false dawn predicted several times. “They could even be endless like the EU-Turkey talks,” he suggested.

India will be closely looking at talks between the three-country Customs Union and Vietnam. The two sides have drawn up a road map of four rounds of ministerial talks this year, supplemented by discussions via video conferencing between officials to keep the momentum going. They have also signed a joint statement which was not the case at the meeting here.

Optimistic about the FTA/CECA giving a major boost to trade between India and Russia, Mr. Khristenko described the negotiations as an “in-depth marriage contract” because many factors will have to be closely studied — harmonisation with World Trade Organisation rules, country of origin norms, impact on other FTAs etc. A long-term goal, he said, was to strike such agreements with regional organisations. Probably, he had the South Asian Association for Regional Cooperation and the Association of South-East Asian Nations (ASEAN) in mind.

On Monday, senior Ministry of External Affairs official Ajay Bisaria had hoped that India-Russia strategic ties would gain further traction with an FTA/CECA. He felt the increased trade post-FTA could be routed through the North-South corridor that would cut down on time and distance to target markets in Russia and Kazakhstan. Analysts point out that these two countries will be better served from the Iranian port of Chah-Bahar.