Thailand, India talk of replacing limited trade pact with FTA
Economic Times | 20 May 2010
Thailand, India talk of replacing limited trade pact with FTA
NEW DELHI: India and Thailand are likely to restart talks on a full-fledged free trade agreement including goods, services and investments. Talks on an FTA were suspended after the two sides implemented a limited agreement involving just 82 items six years back.
“It is important to commence work on an FTA. It would not only include a larger number of goods, but also services and investment,” Thai deputy minister of commerce Alongkorn Ponlabhoot said in an interaction organised by Ficci on Wednesday.
Mr Alngkorn said that he had already discussed the issue with the Indian government and hoped that talks on an FTA would begin soon.
Both countries want to double bilateral trade to $12 billion by 2012 from the present level of $5-6 billion.
“We are hoping that the increase in trade would be generated through cooperation under various agreements like the BIMSTEC, the Asean-India FTA and the proposed Thailand-India FTA,” he said.
India and Thailand signed an early harvest programme in 2004 under which the two sides agreed to eliminate duties on 82 items like television tubes, refrigerators, mangoes, apples grapes and some metals.
The EHP led to protests from the Indian industry which complained that Thailand had gained much more than India and the domestic market was flooded with products like television picture tubes.
The programme was not followed by a FTA because of disagreements related to the rules of origin (the rules which determine which products are to be considered as originating from the partner country and which are to be considered as originating from a third country) and political instability in Thailand.
Commenting on the present political unrest in Thailand, Mr Alongkorn assured that it would soon be over and the Thai Government would be able to restore confidence over both the political and economic conditions in order to draw business and investment from overseas to form partnerships.
The minister said his country was an important market for Indian exports in many sectors, including fishery products, diamonds, chemicals, pharmaceuticals, iron and steel. Thailand is also an important supplier of a range of products to India including a number of electronic parts and components, automotive products, and plastics, that are the key inputs to exports of India’s manufacturing sector.
Thailand is an important member of the ten member Asean group that has signed an FTA with India. A separate FTA between India and Thailand would give both countries the option of offering more than what has been agreed under the India-Asean FTA.
