Go-slow on trade pact with Asean
Calcutta Telegraph
Go-slow on trade pact with Asean
Our Special Correspondent
7 April 2009
New Delhi, April 6: Commerce minister Kamal Nath is unlikely to have with him the papers for signing the free trade agreement when he meets Asean leaders in Thailand this weekend.
Last year, an agreement was worked out by India and Asean officials that sought to eliminate duties on more than 4,000 products.
The waiver is to take effect from June 1. However, as the pact is unlikely to be inked this week, the deadline will have to rescheduled, officials said.
Sources said the UPA government was not keen on the agreement now because of the impending elections and would leave it to the next government to take a call.
The Prime Minister’s Office is believed to have directed the ministry not to initiate any free trade agreement till a new government is sworn in.
Analysts, however, feel any delay in the agreement will strengthen protectionist tendencies and raise doubts about New Delhi’s commitment to the free trade pact with the regional bloc.
According to the deal terms finalised last year, India may not be able to hike the import duty on crude palm oil beyond 37.5 per cent, refined palm oil (45 per cent), tea and coffee (45 per cent), and pepper (50 per cent).
During the negotiations, India unilaterally agreed to reduce the import duty on crude palm oil in phases, from 80 per cent to zero, over the last two years to keep a check on inflation.
The tariff cuts could have political repercussions as palm and pepper are sensitive issues in the southern states
Trade between India and Asean stands at around $40 billion, and the target is to reach $50 billion next year.
The agreement was expected to strengthen India’s chances of being included in future regional arrangements.
