Asean negative list covers only 80% products: India

NEW DELHI: In an interesting reversal of roles in the on-going India-Asean free trade agreement (FTA) negotiations, India has expressed dissatisfaction with Asean’s negative list of items (products to be excluded from duty reduction commitments) and has asked for amendments in order to enhance market access for Indian products.

Speaking to ET, commerce ministry officials said the comprehensive negative list of about 600 products forwarded by the Asean countries was resulting in the inclusion of just 80% of currently-traded products in at least four Asean countries, while India’s offer was taking care of 95% of the traded products.

“Given the fact that the Asean norm is that at least 90% of traded products should be covered by an FTA, the grouping should make suitable alterations in its negative list to ensure this minimum access in all 10 member countries’ markets,” an official said.

Interestingly, while India has responded to Asean’s offers, the latter is yet to respond to India’s fresh offers. Following strong opposition shown by Asean countries over India’s negative list of 854 tariff lines, India reduced the number to 560 in its revised offer.

The remaining 294 items will continue to enjoy tariff protection for the first five years, following which tariffs will be gradually reduced.

The 560 items in the sensitive list include agricultural products (accounting for more than half the number), chemicals and petrochemicals, tobacco, alcohol and textiles. The four agriculture items of primary interest to Asean countries including palm oil, pepper and tea, have, as promised, been kept out of the sensitive list. India has agreed to reduce duties on the products after a standstill of five years.

Asean has not yet reacted to India’s proposal, as Malaysia and Indonesia may not be very enthused by India’s offer to reduce duties on palm oil to 50% from the present 75%.

The countries, which are major producers of palm oil, want duty-free access for their palm oil into the Indian market. India, however, cannot afford to allow that as, in that scenario it will spell doom for domestic varieties of edible oil like mustard oil.