Asean will not offer tariff cuts on 1,900 items

Negative list same as that for China.

Despite India offering to prune its negative list of 560 tradeable items (on which no duty cuts will be offered)with Asean, the trade bloc has insisted it will keep 1,900 items on this list for Indian exporters. This is exactly similar to Asean's negative list for China.

"We have been given a negative list (on which Asean will not offer any tariff concessions) of 1,900 items. This is the same list which they have submitted to China under the Asean-China FTA. We are consulting our stakeholders before finalising our response," a commerce ministry official said.

Officials said the government is likely to submit its response to Asean's negative list next week. The next round of discussions between the two sides is expected to be held in the third week of September.

New Delhi had pruned its negative list to 560 items from 864 items in the ministerial-level meeting last month. India's negative list is at the six-digit level. The list mostly consists of agricultural items.

Officials said the concerns of the domestic industry would be fully protected under the proposed FTA since tariff for Indian goods would be reduced from the present average of 12.5 per cent to just 7.5 per cent over a 10-year period.

India has offered to reduce import duty on crude palm oil from 80 per cent to 50 per cent, tea from 100 per cent to 50 per cent and pepper from 70 per cent to 50 per cent over 15 years. Under the proposal, there would be no cuts in the first five years followed by gradual cuts over the next 10 years.

New Delhi is keen that the agreement for services and investment should be implemented within a year of the implementation of the free trade agreement in goods. If the discussions conclude by the year end as proposed, the FTA could become operational from January 1, 2007.