Bangkok: Ten Southeast Asian countries will sign a free trade pact with India in December to cut import tariffs on goods, but not services or investment, a senior Thai official said on Friday.
“The pact will take effect by the middle of next year as each country needs time to implement the legislation,” Chana Kanaratanadilok, deputy director general of the Commerce Ministry’s Trade Negotiation Department, said.
“The deal, which has been pending since last year, would be inked when leaders of the Association of Southeast Asian Nations (ASEAN) meet in December in Bangkok,” Chana said.
Annual trade between ASEAN and India currently totals $28 billion, a figure that officials hope will rise under the pact.
“Negotiations were bogged down for a year over a list of 1,400 sensitive items proposed by India that was eventually whittled down to 400,” Chana said. Most items on the list related to agriculture or textiles.
“New Delhi has agreed to cut import tariffs to around 5% from around 30% and committed to gradually phasing them out altogether within a few years,” he said.
“Most ASEAN import tariffs, which now average 10%, would drop to around 5%. Once the pact is in place, officials will start talks on liberalising service sectors, such as finance, telecommunications and investment,” he said.
The ASEAN comprises Singapore, Thailand, the Philippines, Indonesia, Malaysia, Brunei, Vietnam, Laos, Cambodia and Myanmar.