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Cautious review of free trade pacts

The PM's Trade and Economic Relations Committee has discussed key strategies on India’s negotiations in several proposed free trade agreements, reports G Choudhury.
Hindustan Times | By Gauarv Choudhury, New Delhi
UPDATED ON JUL 10, 2007 04:50 AM IST

The Prime Minister's Trade and Economic Relations Committee met last week to discuss key strategies on India’s negotiations in several proposed free trade agreements, including those with the Association of South East Asian Nations and the Persian Gulf countries.

Sources said the committee discussed matters pertaining to India's "sensitivities" during negotiations with ASEAN as also issues on further reduction of duties. “It was felt that a further reduction of duties on sensitive products such as palm oils, tea and pepper would adversely affect India’s agriculture, for which it is a livelihood issue,” the sources added.

“Malaysia wants the tariff on palm oil to be reduced to 35 per cent by 2018 as against India’s proposal to bring down the duty on crude palm oil to 50 per cent by 2018. Vietnam wants the tariff on tea and coffee to be reduced to 30 per cent and that on pepper be reduced to 25 per cent by 2018, against India’s offer to reduce them to 50 per cent by 2018,” the sources said.

The next round of negotiations between India and Asean is scheduled for later this month. Talks on the proposed trade deal hit a roadblock with ASEAN not agreeing to the pruned negative list of 563 items suggested by India and insisting on restricting the number to its own list of just 60 items.

In its latest offer, India has said it is ready to scale its list to 490. But the figure of 60 items is still far away.

The negative list includes items such as spices, plantation crops (tea and coffee), vegetable oils (vanaspati and other edible oils), rice, fish, textiles, chemicals and plastics, electronics, automobile components and footwear.

The committee also discussed negotiations on the proposed trade agreement with the Gulf countries and felt that the Indian petrochemcial industry would be at a disadvantage. “The Gulf countries have abundant oil and gas resources. In the long run, the Indian industry, which is paying higher international prices for oil and gas, may not be able to compete,” sources said.

The meeting also reviewed the progress in trade negotiations with Thailand, Japan and the European Union.

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