Bilateral negotiations between India and the trading bloc Association of Southeast Asian Nations (Asean) for a free trade agreement (FTA) has moved a step forward. India has extended the deadline for Asean member countries to submit the list of items they intend to keep outside the tariff reduction programme—called the negative list—till next week.
India had earlier asked Asean members to submit their negative list by mid-March, a stumbling block in the talks for an FTA.
A meeting of senior officials from India and Asean was held on 31 March but could not make much progress since some Asean members such as Singapore, the Philippines and Cambodia have not submitted their negative list to India.
“The trade negotiating committee of the two sides will meet in the next six weeks. We want to take a look at the negative list before that,” said a senior commerce ministry official, who did not wish to be identified. The official added that both sides also have to reconcile their trade figures since India has a financial year from April-March while Asean uses the January-December calender year. “Also, both sides had agreed that the negative list would not exceed 5% of their exports. While the negative list offered by India of 490 items is around 4.5% of its exports to Asean, the negative list in case of some of the Asean members covers 8% of their exports,” the official said.
He, however, pointed out that India was willing to be flexible on the issue.
“In the case of countries such as Malaysia, which primarily exports palmoil, the negative list would be far below 5%. However, it would be higher in case of countries such as Vietnam. We are willing to allow individual member countries to exceed the trade coverage limit so long as on the whole for Asean, the trade coverage in case of the negative list remains close to 5%,” he said
The official said that both sides were still hopeful of concluding the negotiations by July 2007, and effecting the FTA from 1 January, 2008.
The official said that the commerce ministry was also talking to the Reserve Bank of India on treating GIC and Temasek—the investment arms of the Singapore government—as separate entities with regard to their investment in ICICI bank.
This means that both GIC and Temasek will individually be allowed to buy up to 10% each in the private bank. RBI guidelines do not allow a single entity or a group of related entities to hold more than 10% equity of a private bank. “We will convey to Singapore by 13 April, the timeline by which RBI will effect the changes to allow both the investment arms to be treated as separate entities,” the official added.