India set to sign FTA with Asean, giving hope to exporters

India set to sign FTA with Asean, giving hope to exporters

New Delhi/Seogwipo: India is set to sign a free trade agreement (FTA) with the Association of Southeast Asian Nations, or Asean, either in August or October this year, opening the $1.1 trillion South-East Asian market for Indian exporters who find it hard to sell their merchandise in the recession-hit West.

“All the differences have been resolved and the free trade agreement would be signed either on the sidelines of Asean trade ministers meet in August or at the Asean Summit in October," a senior commerce ministry official said.

He said signing trade-opening agreements with Asean and South Korea are on the 100-day agenda of the new United Progressive Alliance government for restoring high growth to the economy.

Negotiations with South Korea have also been completed.

New commerce and industry minister Anand Sharma said he would take the drafts of the two FTAs to the cabinet soon for approval.

The FTA negotiations with the 10-nation South East Asian bloc began in 2001 but went through several rough patches.

The pact, which aimed at opening the 1.5 billion-people market, has been delayed several times due to differences over issues such as restricted list of goods, duty cut in farm products such as palm oil and rules related to value addition.

While the negotiations were concluded in the second half of 2008, differences arose on the methodology of breaking the customs barriers.

Asean accounts for 9.6 per cent of India’s global trade.

India’s exports, which significantly depend on the developed markets of the US and Europe have been shrinking for the last six months on slowdown in demand for merchandise in these recession-hit markets.

The country’s exports managed a meagre growth of 3.4% in 2008-09 at $168 billion.

Meanwhile, South Korea and Thailand criticized North Korea on Sunday, saying the country’s nuclear test threatens world peace and stability and harms efforts to prevent atomic proliferation.

The two nations’ leaders discussed Pyongyang’s latest nuclear blast on the sidelines of a summit between South Korea and Southeast Asian countries being held amid heavy security.

The event was planned months ago, but North Korea’s underground nuclear test and a series of short-range missile launches last week threatens to steal the limelight from economic matters, the main focus of the agenda.

South Korean President Lee Myung-bak and Thai Prime Minister Abhisit Vejjajiva agreed that “the test goes against international efforts to prevent nuclear proliferation and undermines peace and stability not only in East Asia but also in the whole world", Lee Dong-kwan, the South Korean president’s chief spokesman, told reporters.

They also agreed to exert diplomatic pressure to ensure North Korea complies with UN Security Council resolutions and promptly returns to six-party talks aimed at ridding it of nuclear weapons.

The summit venue of Seogwipo—on the island of Jeju off the southern coast—is the South Korean city farthest away from the North. Still, the nervous South Korean government is taking no chances, positioning a surface-to-air missile outside the venue aimed toward the north.

Some 5,000 police officers, including approximately 200 commandos, and special vehicles that can analyse sarin gas and other chemicals, have been deployed nearby, security authorities said in a press release. Marines, special forces and air patrols also kept watch on the island.

Leaders of the 10 members of Asean began arriving for the two-day summit, which officially begins on Monday and commemorates 20 years of relations between South Korea and the bloc.

South Korea’s president planned to use Sunday for individual meetings with Asean leaders.

But concerns about North Korea’s most recent bout of saber-rattling loomed. South Korean officials said on Saturday that spy satellites had spotted signs that the North may be preparing to transport a long-range missile to a launch site.

The North has attacked South Korean targets before, bombing a Korea Air jet in 1987 and trying to kill then-president Chun Doo-hwan in Myanmar in 1983.