Indo-Asean FTA talks back on track

NEW DELHI/KUALA LUMPUR: The Indo-Asean free trade agreement (FTA) negotiations have sprung back to life with India offering to prune the list of sensitive items to 560 from 852 at present. It has also proposed to reduce duties in agriculture products like palm oil, tea and pepper. The talks were stuck due to disagreement over the issue of sensitive list of items.

Speaking to ET, commerce ministry sources maintained that while India was ready to reduce import duties on certain farm products, agriculture items would continue to be in the sensitive list at least for the next five years.

India has offered to cut tariffs on refined palm oil to 60% from 90%, crude palm oil to 50% from 80%, black tea to 50% from 100% and pepper to 50% from 70%, agencies reported.

But these products would stay out of the FTA (since they will be included in the list of sensitive items) and hence would not be subjected to further reduction.

India made its fresh offer at the Asean trade officials meeting in Kuala Lumpur on Friday ahead of a ministerial meeting next week. Sources said that an official reaction to the offer has not yet been made.

India’s commerce special secretary GK Pillai told reporters in Kuala Lumpur that India had offered tariff elimination for more than 4,000 tariff lines constituting 77% of all tariff lines, and phased tariff reduction for more than 600 tariff lines comprising 12% of tariff lines.

He said Asean had yet to counter propose and urged the grouping to submit its list so that the FTA could be finalised quickly.

Minister for commerce and industry, Kamal Nath is optimistic about talks being concluded by the end of the year. “We’ll need to have some correctives. The negotiations are going on and if there is convergence we will conclude talks by the end of this year,” he told reporters in New Delhi.

The FTA talks got stuck over disagreement over the sensitive list of items which are to be excluded from the FTA. India had earlier offered to put 852 items in the list while Asean wanted India to maintain a sensitive list of 60 items with
each member.

Officials said that Asean should now accept India’s offer of a composite list of 560 sensitive items as it had allowed China a sensitive list of 200 items with each of the 10 members which added up to a much higher number.