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Jun. 16 – The long delayed free trade agreement (FTA) between India and the Association of Southeast Asian Nations (ASEAN) is set to be signed in August during the Asean Economic Ministers Meeting to be held in Bangkok.
The agreement was scheduled to be signed in December 2008, but was delayed because of political instability in Thailand then was deferred to be signed after India’s general elections this year.
“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 told The Economic Times.
The FTA will take effect on January 1, 2010 when India reduces tariff on 80 percent of the traded goods, both agricultural and industrial.
Due to plunging exports in the last eight months, India has been looking at other markets to fill the gap left by declining demand from the United States, the European Union and Japan.
India’s deal then with ASEAN offers a way of coping with the global crisis as well as enhancing trade relations with the region. The country is also in trade talks with South Korea.
India has a long history of trading with Asian countries as far back as 2,000 years ago although it only began to engage ASEAN as a group in 1992 when it became a sectoral dialogue partner. India is aiming for ASEAN bilateral trade to reach US$50 billion in 2010 from the latest figure of US$38 billion with a yearly projected growth of 35 percent.
For the years 2007-08, ASEAN trade comprised of 9.63 percent of India’s GDP compared to the previous year’s 9.73 percent.
Details of India’s export and import trade with the ASEAN region through the years can be found here.
