Duty relief under Asean FTA in place
Read more below
- Published 2.01.10
New Delhi, Jan. 1: A free trade agreement with three Asean members — Singapore, Thailand and Malaysia — came into effect today.
Under the pact, India slashed duties on items such as seafood, chemicals, apparels and auto components.
The remaining seven members of the Association of Southeast Asian Nations (Asean) need a few more months for the agreement, which needs to be “internally approved or ratified by their parliaments,” an official said.
The FTA signed in August will open the 1.7-billion-people market in a phased manner, beginning 2010. Exports to Singapore, Thailand and Malaysia account for over 90 per cent of the $44-billion India-Asean trade.
The pact eliminates duties on 70 per cent of the goods traded between the two regions by 2013.
The likely beneficiaries in India are machinery, steel, wheat, auto components, synthetic textiles, refined petroleum products, organic chemicals, pharmaceuticals and gems and jewellery.
According to Chandrajit Banerjee, director-general of the CII, “The elimination of tariffs will go a long way in boosting trade ties between the two regions. Gains from the India-Asean FTA in goods are only a small part of the total gains.
“Indian businesses are looking forward to a successful conclusion of the services and investment agreement, negotiations for which are at an initial stage,” he said.
A comprehensive economic partnership agreement with South Korea also came into effect today. The pact will eliminate tariffs on 7,044 items.
Under the pact, India will eliminate duties on 71.5 per cent of Korean products over the next eight years. Korea will provide relief on 88.6 per cent of Indian imports over the same period.
Higher demand because of Christmas saw exports turning positive after 13 months, growing 18.2 per cent in November.
Exports increased to $13.19 billion from $11.16 billion a year ago, marking a reversal of the decline that had set in since October 2008 because of recession in key markets.
Analysts have cautioned that the worst may not be over as the increase in exports is mainly on account of a low base last year.