Indonesia refuses to budge on ASEAN FTA with India
Indonesia has turned the heat on India in the ASEAN-India free trade agreement (FTA) talks.
By Amiti Sen, TNN |
NEW DELHI: Indonesia has turned the heat on India in the ASEAN-India free trade agreement (FTA) talks. Not only is it unwilling to provide as much market access to India as has been agreed by other members, but it is also pushing New Delhi to cut import duties on crude and refined palm oil much below the levels negotiated by the two sides.
India is unwilling to give Indonesia special favour as it fears other ASEAN members may then ask for the same.
Government sources told ET Indonesia has asked India to commit to reduce import duty on refined palm oil to 30% and crude palm oil to 20%.
This is much lower than the levels negotiated by India with other ASEAN members. India had agreed to take on commitments to lower tariffs on refined palm oil to 51% and crude palm oil to 45%. Officials said it would be very difficult to lower its committed levels further just to accommodate one member.
Indonesia���s export of palm oil to India constitutes about 30% of its total exports to India.
While the applied tariff on edible oil in India is much lower now, the FTA would ensure India cannot ever increase its tariffs on palm oil beyond the committed level.
The last-minute haggling by Indonesia has put on hold the FTA, which is being negotiated since 2005. Earlier, an early harvest programme, which would have led to a fast-track elimination of tariffs on a handful of products, was abandoned due to differences over the rules of origin to be followed in the pact.
���Indonesia is being made to understand that it is not possible for India to reduce its duties on palm oil further. It has also been asked to provide market access to India in tandem with the level provided by India,��� an official said.
Indonesian negotiators have said they need to get the required mandate from their government.
India is hopeful that when the two sides meet again in Singapore in August, the problem would be sorted out and the deal could be signed.
India is unwilling to give Indonesia special favour as it fears other ASEAN members may then ask for the same.
Government sources told ET Indonesia has asked India to commit to reduce import duty on refined palm oil to 30% and crude palm oil to 20%.
This is much lower than the levels negotiated by India with other ASEAN members. India had agreed to take on commitments to lower tariffs on refined palm oil to 51% and crude palm oil to 45%. Officials said it would be very difficult to lower its committed levels further just to accommodate one member.
Indonesia���s export of palm oil to India constitutes about 30% of its total exports to India.
While the applied tariff on edible oil in India is much lower now, the FTA would ensure India cannot ever increase its tariffs on palm oil beyond the committed level.
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The last-minute haggling by Indonesia has put on hold the FTA, which is being negotiated since 2005. Earlier, an early harvest programme, which would have led to a fast-track elimination of tariffs on a handful of products, was abandoned due to differences over the rules of origin to be followed in the pact.
���Indonesia is being made to understand that it is not possible for India to reduce its duties on palm oil further. It has also been asked to provide market access to India in tandem with the level provided by India,��� an official said.
Indonesian negotiators have said they need to get the required mandate from their government.
India is hopeful that when the two sides meet again in Singapore in August, the problem would be sorted out and the deal could be signed.
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