The Hindu Business Line : India, Thailand wrapping up tariff negotiations by June

BILATERAL TRADE: The Commerce Minister, Mr Kamal Nath, with his Thailand counterpart, Mr Krirk-krai Jirapaet, during a meeting in New Delhi on Wednesday. — R.V. Moorthy

New Delhi April 11 India and Thailand would wrap up negotiations on cutting tariffs on goods by June end this year to give a fillip to the Framework Agreement for establishing a Free Trade Area (FTA) so that the bilateral trade volume would go up from $4 billion now to $10 billion by 2010 when the FTA is scheduled to be fully in place, the Union Commerce and Industry Minister, Mr Kamal Nath, said on Wednesday.

Addressing a news conference here jointly with his Thai counterpart, Mr Krirk-krai Jirapaet, Mr Nath said, "we have been endeavouring to increase our economic engagement with Thailand". He said the discussions covered review of bilateral trade and bilateral investments, with both the Ministers underscoring the scope for substantially stepping up the level of two-way trade, which stood at $2.2 billion in 2005-06.

On investments, Mr Nath said that while several major Indian companies have invested in Thailand in the post-liberalisation period, Thailand has emerged as a major investor in India with foreign direct investment (FDI) inflows of about $77.6 million from August 1991 to December 2006.

Early harvest

He said the Framework Agreement for establishing an FTA between India and Thailand has provided for an Early Harvest Scheme (EHS) under which common items of export interest to the sides have been agreed for elimination of tariffs on a fast-track basis. Both the countries have already slashed duties on 82 products including fruits, vegetables, wheat, diamond and some metals.

Mr Nath said that he was looking "at a continued trade growth of 30 per cent annually between India and Thailand''. "In both countries economic activity is increasing and we should take advantage of the momentum," he said.

To a specific query about EHS affecting domestic Indian industry, particularly auto components, the Thai Minister, Mr Jirapaet, told Business Line that "he does not see any danger" as the two-way trade was rising at both sides, which would benefit the consumers in the long run. Thailand had signed a string of trade pacts with Japan, China and Australia and an FTA with India would provide the Southeast nation the market access to the world's second fastest-growing and major economy.

Tariff cut

Later, the Commerce Secretary, Mr Gopal K. Pillai, told presspersons that both the countries had resolved to cut tariffs on as much as 80 per cent of the goods traded bilaterally, even as India-Asean FTA was also based on similar tariff reductions.

He said that Thailand has been demanding India-Asean tariff cuts plus the inclusion of some more items in India-Thailand trade. Asked about the surge in Thai imports into India, Mr Pillai said that the single biggest item was electronic goods and with India's exports to Thailand too picking up this could be overcome.

"We are going to look at the total basket of trade. We are going to address each other's sensitivities," Mr Nath said, adding that Thailand should cut duties on meat, steel wire rods and lower the cost of phone calls to India.