India signs partial free-trade pact with ASEAN

Aug 13, 2009, 9:58 GMT

   Bangkok - The Association of South-East Asian Nations (ASEAN) Thursday signed a partial free-trade agreement with India which is expected to boost bilateral trade by an estimated 13 billion dollars over the next six years.

   Under the ASEAN-India Trade in Goods Agreement signed in Bangkok, tariffs will be reduced to zero on 71 per cent of some 5,000 normal trade items by the year 2013, with another 9 per cent becoming tariff free by 2016. Other sensitive items will have their tariffs reduced to 5 per cent by 2016.

   'Trade between ASEAN and India is expected to increase to 60 billion dollars after the agreement goes in to effect next year,' Thai Commerce Minister Porntiva Nakasai said after inking the pact with Indian Commerce and Industry Minister Anand Sharma.

   ASEAN-Indian bilateral trade amounted to 47 billion dollars in 2008.

   The agreement was signed at the start of the 41st ASEAN Economic Ministers meeting hosted by Thailand, the chair of the association throughout 2009.

   Thailand is expected to be one of the chief beneficiaries of the free-trade pact.

   Bilateral trade between India and Thailand amounted to 6 billion dollars in 2008, with Thailand enjoying a 1-billion-dollar surplus.

   'Thai trade with India is expected to increase to 10 billion dollars after the agreement goes in to effect next year,' Porntiva said.

   The free-trade agreement between India and ASEAN took six years to finalize. It was originally scheduled to be signed last year but was delayed by India, where the government was gearing up for elections, said Krisda Piampongsant, spokesman for Thailand's Commerce Ministry.

   The agreement is a partial one, covering only 'normal' trade items, primarily industrial goods, and excluding many agricultural and handicraft items deemed sensitive.

   The ASEAN-Indian deal also excludes agreements on investment and services.

   'We need to wait a while on services,' Krisda said.

   ASEAN includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.