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 Mahamad Rodzi Abdul Ghani
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 The Economic Times
 India cuts Asean sensitive items list by 294

19/09/06 ( The Economic Times)  NEW DELHI  -  India has finalised its revised proposal for tariff liberalisation for the India-Asean comprehensive economic co-operation agreement. Of the 854 tariff lines India had initially proposed to include in the sensitive list of items (not subjected to tariff reduction), the country has now reduced the number to 560. The remaining 294 items would continue to enjoy tariff protection for the first five years following which tariffs would be gradually reduced. The 560 ite-ms in the sensitive list include agricultural products (accounting for more than half the number), chemicals and petrochemicals, tobacco, alcohol and textiles. The four agriculture items of primary interest to Asean countries including palm oil, pepper and tea, have, as promised, been kept out of the sensitive list.

India has agreed to reduce duties on the products after a standstill of five years. India has agreed to reduce duties on crude palm oil to 50%, refined palm oil to 60% and pepper and tea to 50% over a period of 10 years.

For the 290 remaining items which would be insulated from tariff cuts for the first five years, tariffs would be gradually reduced to 7.5% by ’22.

The list includes chemicals & pesticides, rubber products. leather products, foot-wear, textile products, sewing machines and electrical parts. Tariff elimination would be carried out on two tracks. Tariffs on items falling under normal track-1 will be eliminated by ’11. Tariffs on items falling under normal track-2 will be eliminated by ’15.

The future of the India-Asean CECA now depends on how Asean reacts to India’s proposal. Malaysia had earlier said that India’s informal offer made last month to reduce duties on palm oil was not enough.

The Asean countries have submitted a sensitive list of 600 products to India. The India-Asean free trade agreement, which is supposed to be operational from January 1, ’07, had hit a roadblock when Asean had suspended the talks expressing displeasure over India’s “long” sensitive list including 854 products.

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