India set to sign FTA with ASEAN giving hope to exporters
India is set to sign an FTA with 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 (FTA) 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 the Association of South East Asian Nations (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 the differences over issues such as restricted list of goods, duty cut in farm products like 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 meager growth of 3.4 per cent in 2008-09 at $168 billion.