India and the 10-member ASEAN bloc today signed a trade deal to end duty barriers in the region, after more than six years of intense negotiations.
Commerce and industry minister Anand Sharma, signed the ASEAN-India Free Trade Agreement in Goods following the meeting of the ASEAN-India Economic Ministers, held in Bangkok, hosted by Thailand, the current chair of 42-year old ASEAN grouping.
The first phase of the implementation of trade in goods under the Comprehensive Economic Cooperation Agreement is expected to come into effect by 1 January, 2010 and by 2016, will eliminate duties on 4,000 items, covering 80 per cent of India's imports from the South-east Asian nations.
489 items have been kept out of the pact, keeping in view the concerns of vulnerable domestic industries and agricultural producers. The main areas of differences revolved around sensitive agricultural products, mainly in the plantation sector.
As part of the Comprehensive Economic Cooperation Agreement, the Trade in Goods Agreement will integrate the two globally important economic blocks for mutually beneficial economic gains. ASEAN is a major trading partner for India and accounts for about 10 per cent of its global trade. In the last financial year, bilateral trade between India and ASEAN was more than $40 billion. India and ASEAN have set an ambitious target of achieving bilateral trade of $50 billion by 2010. The current Agreement which comes into force from 1st January 2010 would help achieve this target.
The Trade in Goods agreement focuses on tariff liberalisation on mutually agreed tariff lines from both the sides and is targeted to eliminate tariffs on 80 per cent of the tariff lines accounting for 75 per cent of the trade in a gradual manner starting from 1st January, 2010. The agreement has provided flexibilities to India and ASEAN countries to exclude some of the products from the tariff concessions or eliminations to address their respective domestic sensitivity.