India inks free exim trade pact with ASEAN

India inks free exim trade pact with ASEAN

Has included agricultural products among 489 items in the negative list

India inks free exim trade pact with ASEAN

India, on Thursday, signed an agreement with 10 south east Asian nations for duty free import and export of 4,000 products ranging from steel to apparels to sugar and tobacco over a period of eight years.

After intense negotiations of six years, the pact on trade in goods under the Comprehensive Economic Cooperation Agreement (CECA) was signed by Union Commerce & Industry Minister Anand Sharma and ASEAN Economic Ministers here. The agreement would kick in from January 1, 2010.

While the pact opens the 1.7-billion consumer market to each other, it also eliminates duties on 80 per cent of goods traded between the two regions by 2016.

Under the trade pact, India has included 489 items from agriculture, textile and chemicals in the negative list, meaning these products will be kept out of the duty reduction.
Addressing concerns of domestic planters, black tea, coffee, pepper and rubber have been included in the sensitive list, which could mean duties will be cut by 2019 only. However, duty on these items at no time will be eliminated.

Farmers in South Indian, especially Kerala, fear lower duty on plantation crops like coffe and pepper would lead to a deluge of imports from ASEAN members like Indonesia, Malaysia, which could leave domestic farmers vulenrable to competition.

Industry body Ficci, which has accompanied Sharma, leading a business delegation, said that the agreement would provide access to the large ASEAN market to India.

“It will give Indian business access to the large ASEAN market; Indian industry does not have many concerns (and) sensitivities on agri products have been taken care of,” FICCI business delegation leader O P Lohia, present at the signing ceremony, said.India’s exports to Asesan were about US$17 billion in 2007-08 and imports US$23 billion.

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