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Mahamad Rodzi Abdul Ghani


The Telegrpah, India



Duty duel jars Asean symphony

12/12/05 Kuala Lumpur, (The Tetegaph)  -  A duty duel is raging amid a diplomatic scramble to carve out a pan-Asian free trade area.

The Malaysians, who are hosting the Asean meeting, have complained to Prime Minister Manmohan Singh about a list of 1414 products on which India is reluctant to cut duties. Palm oil, one of biggest exports from the Southeast Asian nation, is on the list. It also includes rice, petroleum goods, crabs, toilet seats and ‘naked and dressed dolls’.

Vegetable oils and petroleum form 77 per cent of Asean’s exports to India. Singh, who met his host, Malaysian Prime Minister Abdullah Ahmad Badawi, later told Malaysian businessmen there was an anomaly in the high duties on palm oil, but stopped short of promising a removal.

Singh accepted the duty problem in a speech he made to Asean businessmen about the free trade area, which he believed would lead to an explosive growth in trade and investment.

“A pan-Asian FTA must be a dynamic, open and inclusive association of countries in our region,” he said.

However, a truncated free-trade pact that will come into effect from 2007 is raising the hackles of Indian business. One of those who take a dim view of the events unfolding in the Malaysian capital is CII chairman Y. C. Deveshwar. “I am all for free trade, but its tough competing when we face high duties internally. We have to build a common market here,” he added. He fears the deal could see Indian firms from furniture to auto parts being swept away by a cheap-import wave.

The Prime Minister’s team is also keen that some of Asean’s surplus savings flow to India. Most countries in the region want to balance bets in China with stakes in India.

Micheal Chow, who heads Columbia Asia, the owner of a large hospital chain, plans 12 healthcare units in India, including one in Calcutta. “India is big on the horizons of many firms now,” he says.

Big is also the term which Asean nations use for India’s infotech and space science technology, both of which the bloc wants to tap.

Malaysians are looking to sell their expertise in construction to India. Samy Velu, a Malaysian minister of Indian origin, spent an hour hard-selling his country's road building firms to Prime Minister Singh.