Bangkok, August 13: India is set to ink a free trade pact with the 10-nation economic bloc of the Association of Southeast Asian Nations on Thursday. The pact will give India access to the trillion dollar market of Southeast Asia’s 10 richest countries.
India and ASEAN will ink the pact in Bangkok opening up the 1.7 billion consumer market in Southeast Asia.
After six years of painstaking talks, the Comprehensive Economic Cooperation Agreement (CECA) will be signed which will eliminate duties on 80 per cent of goods traded between the two over the next eight years.
Commerce Minister Anand Sharma, who is in Bangkok to sign the pact, said the agreement is well balanced and is in harmony with the India’s Look East Policy.
“I can say negotiations have been painstaking. The negotiators have ensured that our sensitive areas where we had concerns are fully addressed,” Sharma said.
When asked whether the concerns of plantation growers of South India have been addressed, Sharma said the whole debate of the CECA adversely impacting domestic planters was based on “uninformed” speculations.
FICCI Secretary General Amit Mitra, who is accompanying Sharma, said, “This agreement will be a win-win situation for India and the Association of Southeast Asian Nations (ASEAN). It takes care of the country’s strategic interest in line with the Look East Policy.”
Under FTA, as many 489 items from agriculture, textile and chemicals have been included in the negative list, meaning these products will be kept out of the duty reduction.
However, duty on products included in the sensitive list, including tea, coffee, spice and rubber, will be reduced by 2019. This has raised political resistance to signing of FTA.
Planters in South Indian, especially Kerala, fear lower duty on plantation crops would lead to deluge of imports from ASEAN members like Indonesia, Malaysia, leaving the domestic procurers in a tight spot.
After signing the agreement, next phase of negotiations will cover trade in services, a key area of interest for India.
Sharma said “papers have been exchanged” between India and ASEAN to start negotiations on trade in services.
India’s Look East Policy is India’s well thought out strategy to increase engagement of the country’s north-east and eastern parts with the entire ASEAN block.
–PTI