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After ASEAN, India mulls FTAs with EU, Oz

Economic Times, India

After ASEAN, India mulls FTAs with EU, Oz

25 Sep 2009

By Nirmala Ganapathy, ET Bureau

NEW DELHI: The controversy over signing the India-ASEAN FTA has not dampened the enthusiasm of the UPA government for pursuing free trade
agreements with other countries.

Apart from the trade negotiations with the EU, the government is juggling with the possibility of entering into free trade agreements with quite a few countries and groupings. At present India is looking at the possibility of entering into FTA negotiations with Australia. Moving fast, a joint study group set up to look into the feasibility of such an agreement between India and Australia is almost ready with the study.

``We are in the process of concluding a feasibility study... a part of the feasibility study is to look at the scope of the agreement. We would be looking at a broad agreement covering goods and services,’’ said Australian High Commissioner to India Peter Varghese after presenting his credentials to President Pratibha Patil on Thursday.

Anyway once the study is completed, the matter will go to the political leadership which will have to take a call on whether to go ahead with the FTA or not. Sources said that discussions at the political level between the two sides are also expected to take place soon. The FTA had came up for discussion during the visit of deputy prime minister Julia Gillard last month with both sides agreeing to move ahead on the matter.

The UPA government has not hidden the fact that it is all for free trade agreements especially in the backdrop of the current economic climate. In its early days, the Manmohan Singh government had quickly signed pending FTAs with Korea and the ASEAN countries. And the ASEAN FTA had gone through in spite of deep reservations being expressed from within the Cabinet and in Kerala.

All eyes are also on the India-EU FTA, which is unlikely to be ready before the EU-India Summit in New Delhi on November 6. Sources said that negotiations continue to take time as the EU countries have to go back to their governments at every stage of the negotiations. The negotiations have been stuck on major issues like the level of trade to be covered in the agreement. Around six rounds of negotiations have already taken place with more to come. Even as negotiations continue, the EU has expressed its interest in concluding the process by 2010.

Apart from the EU, India is also expected to begin a new round of FTA discussions with Japan later this month. The negotiations with Japan had come unstuck over a number of contentious issues but both sides are now ready to get back to the negotiating table. Yet another FTA which is in the works is the free trade agreement between India, the South American trade bloc Mercosur, and the Southern Africa Customs Union. At the recent IBSA (India Brazil South Africa) meeting, the three countries had agreed to back negotiations to seal the free trade agreement.