Ficci supportsgovt on Asean FTA negative list

NEW DELHI: The domestic industry has supported the government for refusing to reduce its negative list for the proposed India-Asean free trade area (FTA) below 560 items.

Ficci has urged the government to convey to Asean that there was no scope for further trimming the negative list or offering deeper tariff cuts, in view of the sensitivities of India’s large agriculture-dependent population and small & medium scale enterprises. A negative list includes items which would not be subjected to tariff reduction commitments under the FTA.

Ficci president Saroj K Poddar said that while an FTA is quite important for India, it could not be at the expense of domestic industry and agriculture. Citing a study by the United Nations Conference on Trade and Development, he said that if full tariff liberalisation was undertaken vis-a-vis Asean, the edible oil sector in India would be the hardest hit. Production displacement is likely in spices, tea and coffee.

According to Ficci, India has always displayed its keenness for the Asean FTA, with its latest offer having ‘trade coverage’ of more than 94% in terms of tariff concession. India’s present negative list provides for just 5.6% of export value from Asean to India.

Earlier, India had displayed additional flexibility in agreeing to a somewhat relaxed “rules of origin” for FTA with Asean, as compared to similar agreements with other countries, the release said.The industry wants Asean to come up with matching offers and accommodating approach, respecting India’s sensitivities to help conclude the agreement.

The industry has also called for a reduction in the negative list of items proposed by Asean, since it results in a trade coverage of just 80% of products traded between India and at least four major Asean members.s