Guard sensitive list at Asean meet: Industry

With less than two weeks to go for the Association of South East Asian Nations (Asean) summit in Singapore, industry chambers say it is important to safeguard the sensitive list of items and negotiate the services and investment issues before finalising the free trade agreement (FTA) with the bloc.

Government officials recently told Business Standard that the negotiations on the proposed FTA were likely to spill over to the next year due to differences over duty cuts on farm products like palm oil.

According to the Confederation of Indian Industry (CII) and the Federation of Indian Chambers of Commerce and Industry (Ficci), the delay did not matter as long as genuine differences were sorted out.

Ficci Secretary General Amit Mitra said the completion of the FTA had a tremendous political significance with regard to India's look-east policy.

"However, even if the FTA does not see itself through due to genuine disagreements, it will not lower India's trade basket as the volume of trade (with the bloc) is relatively small," he said.

Mitra added greater interaction among each others' societies and culture was also important. "Both India and Asean countries need skilled human resource, so people-to-people contact is a must," he said.

Ficci says engagements in the services sector and investments should be negotiated simultaneously with trade in goods.

According to the CII, the FTA will go a long way in strengthening ties between India and the 10-nation bloc provided the items in the sensitive list are safeguarded.

Asean accounts for 10 per cent of India's trade basket. In 2006-07, exports to the region increased by 20.67 per cent to $12.56 billion, while imports grew by 66.15 per cent to $18.08 billion.