11/08/2008 (Monster and Critics), New Delhi - Under a free trade agreement to be signed at a summit in Bangkok in December, India will substantially reduce duties on about 96 per cent of items it trades with the Association of South East Asian Nations (ASEAN), news reports said Sunday.
The free trade agreement (FTA) has been on the anvil for over two years and the two sides finally hammered out an agreement during recent discussions in Brunei, PTI news agency reported quoting an unnamed highly-placed Indian official.
At the India-ASEAN summit, India will keep at least 300 farm sector items out of the FTA with the 10-nation bloc, the official said. It will also contnue to protect textiles and chemicals, two areas of strength for the ASEAN.
The ASEAN nations will be protecting its steel and automobile industries, the official said.
The main hitch to the FTA - differences over market access for palm oil products - has been resolved, the official said.
India has committed to cut import duties on crude palm oil by 37.5 per cent and on refined palm oil by 45 per cent by 2018.
India has also agreed to Malaysia's demand to bind duty on petroleum crude imports at zero.
The FTA is scheduled to be signed at the India-FTA summit at Bangkok in December. Indian Prime Minister Manmohan Singh plans to attend the summit.
The FTA will come into effect from either January or June 2009, PTI reported. 'We are happy with both dates,' the official was quoted as saying.
India would be keeping a total of 489 items on the 'negative list' and out of the FTA but its tariff reduction commitments would cover 95.65 per cent of the currently 30-billion-dollar trade with the ASEAN countries.
The ASEAN members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.