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India to align ROO on ASEAN model

Financial Express, India

India to align ROO on ASEAN model


20 January 2005

NEW DELHI, JANUARY 20: India will adopt the Indo-ASEAN FTA criterion for Rules Of Origin (ROO) for all the other trade pacts with Asian countries, including Thailand and Singapore, and the commerce ministry is expected to take a proposal in this regard to the cabinet by February.

This is being worked out to bring about uniformity in the rules and align them with ASEAN countries, which will serve as the model for other trade pacts in the region, official sources told PTI.

ROO with ASEAN have been agreed at 40 per cent value addition only, thus making them more liberal than those with other trading partners like Thailand, Singapore and SAFTA, where the criterion also included change in tariff head besides 40 per cent value addition.

Rules of origin govern the process of determining origin of products in a particular country.

The early harvest scheme under the Indo-Thai free trade agreement is already under operation and a full-fledged FTA would come into operation from 2006 while the first phase of ASEAN agreement is expected to come into implementation from April One.

It may be noted that Indo-Thai FTA had got delayed due to differences over ROOs as India was insisting for 40 per cent value addition plus change in tariff head at six digit level.

However, later when Prime Minister Manmohan Singh visited that country to attend the BIMSTEC summit, differences were sorted out after his meeting with his Thai counterpart Thaksin Shinawatra.

The interim ROOs for early harvest into operation from September 1, 2004, were subsequently firmed up at 40 per cent value addition and change in tariff heading at four-digit level besides specific rules for some products.

With the ASEAN agreement coming into operation on a full-fledged basis in 2009, it could complicate matters, as ROOS would be different for ASEAN and its individual members Thailand and Singapore with which negotiations were currently on. India has been pressing for 40 per cent value addition plus change in tariff head with Singapore also.

India and China are also exploring the possibility of an economic cooperation agreement which is at the joint study group stage.