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 22 Feb 2009

Unresolved tariff issues delay signing of India-Asean trade pact

India is likely to sign a trade pact with the 10-nation economic bloc Asean in April, India’s state news agency PTI quoted Commerce and Industry Minister Kamal Nath as saying Friday.

“Maybe at the Asean summit at the end of April,” Nath said on being asked when the Comprehensive Economic Cooperation Agreement (CECA) with the regional body is expected.

He said there were certain issues including duty cuts which are yet to be sorted out. "We got a letter a day before yesterday (from Asean), which is not acceptable to us," Nath said after a bilateral meeting with New Zealand Trade Minister Tim Groser in New Delhi, India’s capital.

A senior Commerce Ministry official had earlier said the pact was scheduled to be signed on February 27 in Thailand.

If the agreement, seeking to make 95 percent goods tradeable between India and Asean duty-free, were to be signed later this month, the first phase of reduction would start in June to be followed by another tranche on January 2010. It would mean India cuts duties twice in six months.

"We cannot have cuts in six months...that is one of the issues, so we are looking at it," Nath said, adding, the summit was scheduled for April, and the two sides have time to sort out the pending issues.

India-Asean trade agreement would pave way for 1.5-1.7 billion people to trade without tariff restrictions. Though known by the nomenclature of CECA, it would be a free trade agreement clinched in August 2008.

However, it could not be signed, as scheduled in December 2008 due to political unrest in Thailand.

When asked who would be signing the agreement from the Indian side, Nath said: "The Prime Minister will decide who will sign it."

To a query if Prime Minister Manmohan Singh would be attending the summit, Nath said," I do not know what the Prime Minister's decision on attending the summit is...but it is a summit and Prime Minister has been attending all the summits."

On the trade between India and New Zealand, Nath said the two countries have agreed for an early commencement of free trade agreement negotiations. A joint study group (JSG) report has said there is considerable potential to increase bilateral trade.

The trade between the two countries in the first seven months of this fiscal was USD 394 million. FDI inflows from New Zealand to India was USD 16.8 million mainly in power, food processing and computer software sector.




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