India will sign a free trade deal with the Association of Southeast Asian Nations (ASEAN) as expected in December after around four years of talks, an Indian minister said.
India said last year it wanted to lift two-way trade with ASEAN to $50 billion by 2010, up from $38.4 billion in the 2007/08 fiscal year.
“The formal signing of the India-ASEAN Free Trade Agreement will be around December 18,” Junior Trade Minister Jairam Ramesh told a business conference.
Negotiations began in 2004, and have resulted in a deal under which import tariffs will be reduced or eliminated on 96% of items traded between the two from Jan. 1, 2009.
India will cut import tariffs to around five percent from around 30% for a majority of traded items and has committed to gradually phasing them out altogether within a few years.
Under the agreement, most ASEAN import tariffs, which now average 10%, would drop to around five percent.
Negotiations became bogged down for a year over a list of 1,400 so-called sensitive items that India wanted left out of the deal. That has since been whittled down to 489 items, including petro-chemicals, textiles, natural rubber, vegetable oils and food items.
“India has shown remarkable flexibility. Despite running a trade deficit, we embarked on a free trade agreement,” Ramesh said.
India exported goods worth $16 billion to ASEAN in the fiscal year to end March this year and imported merchandise worth $24 billion.
Ramesh said talks on investment and services were expected to begin once the deal had been signed.
ASEAN comprises Singapore, Thailand, the Philippines, Indonesia, Malaysia, Brunei, Vietnam, Laos, Cambodia and Myanmar. (Reuters)