Talks with Asean members

The government may explore the option of fast-tracking bilateral negotiations with individual Asean member countries like Malaysia and Indonesia if the deadlock over finalisation of the free-trade agreement with Asean continues.

Talks between New Delhi and the Asean are stuck over the finalisation of the negative list (India will not subject items in this list to tariff reductions) and the issue of lowering import duties for items like palm oil, tea, coffee and pepper.

"We may pursue bilateral agreements with the Asean member countries like Malaysia and Indonesia," a ministry official told Business Standard.

India and the Asean are slated to hold their next round of discussions at Singapore in the last week of this month.

India has already announced joint study groups to explore bilateral cooperation with both Malaysia and Indonesia.

Trade experts however contend that it will not be easy for India to ink bilateral agreements with both countries unless it agrees to offer import duty cuts on items like palm oil which are of huge export interest to them.

India has already pruned its negative list for Asean to 991 from 1,414 items. However, it still wants the country to prune the list further.

It is also seeking duty cuts on palm oil, pepper, tea and coffee which account for a substantial share of its total exports to India.

New Delhi has offered tariff rate quotas on these items for individual member countries of Asean, in order to fulfill the substantial trade coverage clause. Asean is yet to respond to the offer.

The commerce ministry is reluctant to shorten the list of negative items because of increasing concerns raised in political quarters about protecting the interests of farmers and of the domestic industry.