R.Y. Narayanan

Coimbatore, Jan. 21

INDIA is in the process of preparing a list of items to be included in the `sensitive list' for discussions with Thailand with which it had signed a Free Trade Agreement (FTA).

While opening up the domestic economy, the Government is conscious of the need to provide a level playing field to the domestic manufacturers, subject to economic logic, according to a senior official from the Ministry of Commerce.

He did not agree with the view that the FTA with Thailand would hurt the business of Indian manufacturers and cited the case of Sri Lanka, with which India has a similar agreement, which has not worked against the interests of Indian companies.

Speaking to Business Line, the senior official, who did not want to be named, said the Central Government had commissioned study by an independent agency which has looked at all aspects of negotiations. Fifteen sectors have been identified based on certain parameters and on the basis of the report discussions have been held with different government departments and industry associations have been taken into confidence.

He said the sensitive list was yet to be finalised and once it was done, it would be discussed with the Thai authorities and it would take a final shape after discussions were completed and it would be mutually beneficial.

On the concern expressed by some sectors that the FTA would open the flood gates for cheaper imports undermining the domestic companies, the official said the Government was conscious of the need to provide a level playing field to the Indian companies even while making way for import of products.

Citing the case of Sri Lanka, with which India has signed an FTA, the official pointed out that when India allowed import of 15 million kg of tea from Sri Lanka at a reduced tariff, there were apprehensions that it would work against the interest of domestic tea producers.

But this has not happened and the import of tea from Sri Lanka was just a fraction of the quantity permitted from that country. While the number of products that might be covered under the FTA with Thailand could be higher compared to Sri Lanka, he did not feel that this would put the Indian manufacturers at a disadvantage.

The Indian industry also should look at this as an opportunity to capture the markets in the region since the signing of FTAs with other countries provided a window to the Indian companies to get a preferential tariff treatment.

(This article was published in the Business Line print edition dated January 22, 2005)
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