The Hindu Business Line : India, Asean to sign trade pact in December

On the anvil of negotiations for nearly six years, the new trade-in-goods agreement is seen by the Asean as a testament to India’s commitment to multi-lateralism, more so in the context of the current “pause” in the Doha Round of global trade talks.

With India and the 10 Asean countries accounting for a cumulative Gross Domestic Product of $2.3 trillion at present, the latest accord can help carve out a mega free trade area with over 1.7 billion consumers.

And, for the Asean, already tapping China’s economy which is seen growing at a virtual space-age velocity, the new accord with India sets the stage for negotiations on a services-and-investment agreement. These talks will begin soon, and the Asean wants them concluded by the end of next year.

The Asean-India trade agreement was announced after the two sides held their latest annual consultations among economic ministers.

The Union Commerce and Industry Minister, Mr Kamal Nath, who represented India, said “determination” on both sides, saw them through the protracted talks. The pace of intensification of India’s “unilateral liberalisation,” reflected in a peak average import tariff of just 9.7 per cent now, defined and catalysed the process, he indicated.

The Singapore Trade and Industry Minister, Mr Lim Hng Kiang, noted that talks on the trade pact were piloted on the basis of an acknowledgment that the two sides possessed “very similar economic structures”. The parleys might have proved easier if the economies of India and the Asean were “complementary in structure”.

India now expects its trade with the Asean bloc, now of the order of $38 billion, to touch or “surpass” $50 billion by 2010. Malaysia, which will co-chair the Asean-India panel on investments after having presided over their negotiations on goods, said the two sides would “eliminate import duties on 71 per cent of the products by December 31, 2012”.

Another nine per cent of the overall product basket will be similarly covered by 2015. The import tariff on “sensitive items,” now in the range of eight per cent to 10 per cent, is set to drop to five per cent by 2015.

Singapore, which will co-chair the panel on services, said the “disparate exclusion list” in the goods accord, covering 489 items in respect of all 11 countries, would account for five per cent of the two-way trade value.

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