The Hindu Business Line : Asean FTA: India warily hopeful of negotiations

Hurdles
India is awaiting the response of the Asean members for their submission of detailed offer.
India had forwarded its comprehensive offer in May 2007.

G. Srinivasan

New Delhi, Sept. 9

India is cautiously hoping that its negotiations with the Association of South-East Asian Nations for wrapping up the free trade agreement would proceed apace even as some of the countries of the 10-member group have not yet submitted their detailed offer for negotiations.

Official sources told Business Line here that India is awaiting the response of the Asean members for their submission of detailed offer and if nothing is heard from their side before September 12, New Delhi may not see any point in attending the meeting scheduled by Asean on September 17.

They recalled that India had forwarded its comprehensive offer in early May and only Malaysia, Thailand, Lao and Brunei have so far submitted their detailed lists.

Differences

The sources said twin cap of 489 tariff lines and 5 per cent import value under exclusion list has been achieved by India, while Thailand, the Philippines, Vietnam, Myanmar and Cambodia are yet to conform to this.

While it has been resolved that reciprocal trade coverage within (plus/minus) 1 per cent would be maintained, Myanmar and the Philippines are yet to reformulate their lists to adhere to this decision, they said.

Stating that India’s offer consists of 542 tariff lines in sensitive list (SL) and five tariff lines in special products (crude palm oil, refined palm oil, tea, coffee and pepper), the sources noted that Indonesia and the Philippines have maintained SLs of 602 and 935, respectively.

Vietnam and Indonesia have maintained highly-sensitive lists (HSLs) of 452 and 258, respectively. They said that India has offered a gradual reduction of tariff on crude palm oil to 50 per cent level by 2018 and on refined palm oil to 60 per cent level by 2018.

There is also some disagreement over end-date for SLs and HSLs with Asean insisting that the end date for tariff elimination under Normal Track-II would be January 1, 2015, instead of India’s proposal for December 31, 2015. In a like manner, Asean proposed January 1, 2015 and January 1, 2018 for sensitive and highly-sensitive track lists are shorter than India’s for end-2015 and end-2018, respectively. New Delhi apprehends that fast-tracking of end-dates by a year would be intractable for the domestic constituents to absorb.

The sources said that in every category, India's offer is more liberal compared to a few Asean members. Thus while India is offering tariff concessions on Malaysian exports to India worth $1,570 million, Malaysia is offering concessions worth $246 million only of India's exports. Similarly in the case of Indonesia, India is offering tariff concessions worth $2,506 million, while Indonesia's offer is $411 million only.

Commenting on this, the Minister of State for Commerce, Mr Jairam Ramesh, said that India's offer of concessions in every category - normal track, sensitive track and highly sensitive track - is more liberal compared to that of Malaysia, Thailand, Indonesia and Vietnam.

He said that India has also adopted a very liberal approach on rules of origin (ROO) and value added. Instead, of the usual CTH plus 40 per cent value-added formula that has been New Delhi's stance, it has agreed to CTSH plus 35 per cent value-added for the FTA with Asean, even though many domestic stakeholders were squeamish about the change.

Mr Ramesh also noted that India agreed readily to the suggestion that while each Asean member country would submit its own separate list of sensitive products, India would submit a single such list for Asean as a whole.

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