Aug. 14 – India has finally signed a free trade agreement (FTA) with the Association of Southeast Asian Nations (ASEAN) after years of delay that will include tariff cuts on an estimated 4,000 products.
The FTA is expected to boost trade between the two to US$50 billion by next year. “The agreement with ASEAN is well-balanced and is in harmony with India’s ‘Look East’ policy,” said Commerce and Industry minister Anand Sharma in a statement after the signing ceremony in Bangkok yesterday.
The agreement will be implemented beginning January 1, 2010 and will take take out duties on about 3,200 products by December 2013, while duties on the remaining 800 products will be brought down to zero or near zero levels by December 2016 says The Economic Times.
An estimated 489 items are not included in the agreement, mostly farm products, automobiles and certain categories of auto parts, machinery , chemicals and textile products. Farm products considered to be sensitive industries like palm oil, tea, coffee and pepper will be covered by the FTA but tariff cuts will be applied in staggered steps within 10 years.
This trade agreement is sure to help India prosper and not only. It will serve to stabilize the region.
I’d 100% agree with that India – it’s been a long time coming but well worth the wait. It’s also arrived, I feel, at a time of greater Indian political maturity as well, when it can really start to mean something. Thanks for commenting. – Chris
FAT will bring a revolution in industrial development & create trade harmony between ASEAN countries. I think , it would have positive effect on our growing economy
Spot on Vishesh, and something we commented on over at India Briefing about the potential impact on Bengal: http://www.india-briefing.com/news/indiaasean-trade-pact-benefit-bengal-848.html/
Thanks! Chris
Chris: What will be its impact on the NorthEast India? Also…write some articles about the growth/developments in that region. Govt is putting more focus on that part of the country. AEAN trade pact will give a boost to that. Also..how about the impact of IT/ITES revolution in NorthEast India?
Thanks Sandeep, we are putting together the next issue of “India Briefing” magazine right now which will be out at the end of the month, plus I’m currently writing our “India Briefing Guide To Doing Business In India” which will contain regional as well as regulatory text. However I thank you for your suggestion and will also ensure our research people are on it. All our Regional sites (2point6billion, China Briefing, India Briefing and Vietnam Briefing) will contain more specific, report based pdf articles from the Autumn onwards, so please look out for those. I’ll be visiting our (small) Kolkata office mid-September and meeting with Government officials to examine the anticipated investment trends in West Bengal. It does appear that at last both the city and the region may finally have something to look forward too. We are also very interested in the growing trade links between Kolkata and Guangdong Province. We’ll put up material as soon as we can find issues of importance, and I would agree, Kolkata with the ASEAN deal has just been thrown a very large incentive to get its act together. Exciting times. Thanks – Chris
Although belated, this is the right decision taken by my government in right time to make our Look East policy an effective one. In this globilized world, I believe the South-South Cooperation will remain the most effective model to develop better linkages among the southern countries. At last , my country has given a pragmatic dimension of our Look East Policy.
We believe so Prof. Chakraborti, and are looking forward to a new era of Sino-India cooperation and development. India certainly seems to be ushered in a new era of pragmatism and economic development. lf this can balanced with the environmental considerations then the next few decades will be highly productive ones for both the Indian people and the rest of South-East Asia. Thanks for your comment – Chris
Hi Chris,
Sorry to add the West Bengal govt. has done a total bummer on the IT/ITES side (ref Infosys and Wipro not being provided required land). My take is Nort-East India will never be a IT/ITES hub UNLESS the political environment in these states reaches a level of stability. Furthermore, the infrastructure (water, electricity, roads) in N.E. states is poorer as compared to other Tier-2 locations such as Cochin, Trivandrum, even Lucknow.
The next step for BPO evolution is in tier-2/3 cities yet N.E states will seemingly loose out on this opportunity.
Regards,
Mayur
Thanks Mayur; I think you’re right. The political situation there is still very anti-business and not forward thinking at all. There really needs to be on-the-ground change in West Bengal to enable it to reach its potential. I’d like to see it happen, and we personally try to do our bit (we have a small office in Kolkata) but change has to come from desire of the local officials to make it so. Without that it is so much harder. Tata’s abandoned Nano factory is a case study in point. – Chris
Where can I get the full text of the India AAsean free trade aGREEMENT
How it(FTA)can help North=East India particularly Manipur through Moreh(India)/Tamu(Myanmar) border and it is well connected major cities of upper Myanmar/Thailand and other ASEAN countries.
Thanks
Asean free trade is sure going to increse the export and import of the country. It is not going to harm the farmers as the agreement is in harmony wiyh the look east policy.Mainly southern parts the country is more concerned with this agreement.But this will help trade grow inthe country and there should’nt be aneed for worry…..
where can I check the list of items exempt under this agreement