India considers lifting Brunei oil duty
India’s government has agreed to consider Brunei’s request to export crude oil to India at zero duties, reported The Brunei Times on Wednesday.
The Brunei Times quoted a news report of an Indian press which reported that an Indian government official said, “We have agreed to phase out duties on crude oil over a period of time for Brunei and not for any other country.”
Crude oil forms the bulk of Brunei’s exports, said the Indian government official, adding that this is not the case with neighbouring Malaysia.
It comes as a concession under the Asean-India Free Trade Agreement (FTA).
During negotiations for the trade pact, which were concluded recently, the Brunei’s sultan requested that India scrap the duties on crude oil in exchange for the lowering of import duties on a number of goods from one of the Association of Southeast Asian Nations’ (Asean) dialogue partners.
Government officials from the two countries have yet to officially announce the concession.
It is not a binding commitment for India, which has unilaterally scrapped duties on import of crude oil.
India imports 75 per cent of its crude oil requirements. As an “inflation control measure”, the Indian government has scrapped the import duty on the commodity, Indian press reported.
Negotiations on the modalities for trade in goods between India and the 10-member bloc reached a conclusion last week at the 4th Meeting of the 39th Asean Senior Economic Officials Meeting (SEOM) at The Empire Hotel & Country Club.
Although running late by two years, the FTA is now scheduled for enforcement from January 1 next year after it is ratified by the governments of Asean member countries and India. On August 27 this year, Asean trade ministers will meet top Indian officials in Singapore to formally announce the conclusion of talks.
The key meeting comes closely following the collapse of the Doha round of global trade talks last week, a failure which analysts have said prompted countries to expedite negotiations for regional trade agreements. The Asean-India FTA is the bloc’s fourth with a dialogue partner, following similar arrangements with Japan, China and South Korea.
Following the conclusion of talks on modalities for trade in goods, Asean and India will also look at establishing a similar pact which will also include services like the knowledge industry, Indian High Commissioner to Brunei R V Warjri said in an earlier interview.
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