India to sign FTA with Asean

Speaking after meeting with the Indian trade ambassador based in Thailand, Commerce Minister Porntiva Nakasai said the letter would confirm India will not attempt to change any of the provisions of the FTA, the negotiations for which concluded last year.

"The letter will guarantee that the FTA will be signed during the Asean Summit," said Porntiva.

To ensure that Thailand can also commit to the FTA, the ministry will soon ask for parliamentary approval to sign the pact, in accordance with Article 190 of the Constitution Act, which requires such endorsement for international agreements.

Under the FTA, Asean and India will be committed to liberalising trade in goods. Thailand now enjoys zero tariffs on only 82 items exported to India.

About 75 per cent of trade in agricultural and industrial products will be gradually brought down to zero tariffs by 2012, while tariffs for another 10 per cent will be eliminated in 2015. The rest consist of sensitive items that must be renegotiated. Thailand will refrain from lowering tariffs on 91 sensitive products, including shrimp, wheat flour, textiles, leather, steel and stationery.

With lower tariff barriers, trade between India and Asean should increase significantly from the present US$28 billion (Bt978 billion) annually, while Thailand's trade with India should increase to $10 billion in the next three years.

In 2007, trade between Asean and India was worth $28.7 billion, of which exports from Thailand to India were valued at $4.73 billion.