Aug 13, 2009, 10:29 GMT
Bangkok - The Association of South-East Asian Nations (ASEAN) Thursday signed a partial free-trade agreement with India which is expected to boost annual 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 all trade items by the year 2013, with another 9 per cent becoming tariff free by 2016.
The remaining 20 per cent include a list of items on exclusive or sensitive lists, on which high tariffs will be maintained or reduced to 5 per cent.
'Trade between ASEAN and India is expected to increase to 60 billion dollars after the agreement goes into 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 into 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 are trying to expedite an agreement on investments and services,' Indian Commerce Minister Sharma said.
But ASEAN is known to be more hesitant about services than trade with India, which has a population of close to 1.1 billion.
'We need to wait a while on services,' Krisda said.
ASEAN includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
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