Thai officials resume trade talks today

India and Thailand will begin discussions tomorrow on the list of sensitive items that will have no tariff concessions under the free trade agreement (FTA). The agreement is to be expanded to cover services and investment.

The two sides have already operationalised an early harvest scheme in September under which duty concessions have been given to 82 products. The FTA for goods is expected to become operational from July, 2005, and completed by 2010.

The negotiations for services and investment are expected to be finalised by 2006. The two countries have decided to have an investment cooperation agreement.

Speaking at a seminar organised by the Federation of Indian Chambers of Commerce and Industries here today, Thai Vice-Minister of Commerce Parnpree Bahiddha-Nukara said: "FTA should be seen not as a threat but as an opportunity to achieve greater competitiveness."

Nukara pointed out that bilateral trade shot up to $ 1.7 billion after the early harvest in September from a figure slightly over $ 1 billion, when the framework agreement for the FTA was signed in 2003.

Urging the Indian Industry to look at the prospective benefits of the FTA in its totality, he said neither of the economies was highly competitive in every aspect of production and, in fact, complemented each other.

Joint Secretary in the Commerce Ministry SS Kapur said negotiations had reached a critical stage with the two sides exchanging their respective lists of sensitive items and finalising the rules of origin.

Kapur said there were primarily three tracks of negotiations "" a sensitive list on which there would be no tariff concessions, a phased reduction list on which the duties would be reduced to around 5 per cent and an elimination list on which duties would be reduced to zero.

He said negotiations had also begun on an FTA in services, and a draft for an investment cooperation agreement was being finalised.

Kapur pointed out that sectors such as tourism, healthcare and business process outsourcing had already been identified as potential areas under services.

He said that the FTA with Thailand would contain a review clause for the sensitive items. He pointed out that the Saarc FTA also had such a clause to enable member countries to review the list from time to time.