India, ASEAN to sign free trade agreement on 17 December

Mumbai: India will sign a free trade agreement with the Association of South East Asian Nations (ASEAN) on 17 December to better integrate with Southeast Asian economies , union minister of state for commerce Jairam Ramesh said in Bangalore on Monday.

He said prime minister Manmohan Singh would sign the pact in Bangkok.

As of now India runs a substantial trade deficit with ASEAN. Indian imports from that region was of the order of $24 billion during 200708 while its exports to the ten-nation group were to the tune of $16 billion in the same period.

''In spite of the trade deficit, we are going ahead with signing FTA in goods as a signal that India is integrating with rest of Asia which is the most economically prosperous part of the world," the minister said.

"Once the FTA in goods is signed, negotiations will begin on signing a similar agreement in services in which India has a comparative advantage, and we will also have FTA in investment," he added.

Once the FTA came into force, import duty on tea and coffee would come down from 100 per cent to 50 per cent, that of pepper from 70 per cent to 50 per cent by the year 2018, he said.

The minister said he had submitted an action plan to the prime minister to strengthen Indian tea, coffee and pepper industry over a ten-year period in order to meet the ASEAN challenge.