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India to cut duty on ASEAN trade items

India to cut duty on ASEAN trade items
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First Published: Sun, Aug 10 2008. 12 04 PM IST
Updated: Sun, Aug 10 2008. 12 04 PM IST
New Delhi: India will eliminate or substantially reduce duties on almost 96% of the items it trades with ASEAN but protect the sensitive agriculture sector by keeping over 300 items out of the free trade agreement with the 10-nation bloc.
“The other sensitive areas which New Delhi will protect from the FTA include textiles and chemicals, the two areas of strength for the ASEAN,” a high level official told PTI.
The two sides have resolved their differences on the level of protection and the demand for market access for products mainly palm oil.
Though running late by two years, the formal announcement for conclusion of the talks will be made in Singapore around the month-end by trade ministers from India and other leading ASEAN members.
The agreement will finally be signed at the India-ASEAN summit in December in Bangkok, to be attended by Prime Minister Manmohan Singh.
While India protected its sensitive industries like textiles and chemicals, the ASEAN shielded its turf on automobiles and steel.
In all, India will keep 489 items out of the tariff cut by putting them in the negative list but the tariff reduction and elimination commitment will cover 95.65% of the country’s $30-billion trade with the south East-Asian trading bloc.
The issue of tariff reduction on palm oil, which became the major stumbling block for the negotiators, has been clinched with India committing duty cut to 37.5% on crude palm oil and 45% on refined palm oil by 2018.
India has also acceded to Malaysia’s demand for binding the duty on petroleum crude oil at zero. “It (duty reduction) is notional, because today it is already zero,” the official said.
Crude oil duty scrapped
India has scrapped import duty on crude petroleum since June this year because of high inflation. While India’s commitment to bind duty at zero on crude petroleum import from Malaysia does not make a difference at present because of unilateral tariff scrapping on the item, the country has a choice to impose duty.
Should the duties be imposed again on crude oil, its imports from Malaysia will come at zero duty.
After the agreement is signed in December, a huge India-ASEAN market of 1.5 billion people will be thrown open either from January or June 2009.
“We are happy with both the dates,” the official said.
Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam make up the 10-nation ASEAN bloc.
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First Published: Sun, Aug 10 2008. 12 04 PM IST
More Topics: India | ASEAN | Trade | Crude Oil | Import Duty |