India, Malaysia to sign free trade pact tomorrow

India, Malaysia to sign free trade pact tomorrow

The FTA with Malaysia will be signed on the heels of India inking a Comprehensive Economic Partnership Agreement (CEPA) with Japan in Tokyo yesterday. India-Malaysia Comprehensive Economic Cooperation Agreement (CECA) to be signed in Kuala Lumpur will cover trade in goods, services and investments.

The two countries have already liberalised their trade in goods through an India-ASEAN free trade agreement, which came into force from January 2010. Malaysia is a key member of Association of Southeast Asian Nations (ASEAN). The new agreement with Malaysia will enable further reduction in duties, thus opening the bilateral trade.

Besides, opening market for merchandise, the pacts also aim at liberalising trade in services like relaxing barriers on movement of professionals, an area of particular interest to India. The pact was aimed at reducing or eliminating tariffs over 90 per cent of the goods traded between the countries. It will give Malaysia concessions for export of palm oil and related products.

India will benefit from sectors like textiles and services like IT, lawyers and accountants in Malaysia. While Malaysia will get advantage in tourism industry. The agreement will be signed by Malaysian International Trade and Industry Minister Mustapa Mohamed and Commerce and Industry minister Anand Sharma.

The pact was finalised during the visit of Prime Minister Manmohan Singh to Kuala Lumpur last October. The agreement with Malaysia is expected to come into effect from July.