India, Asean to ink chem free trade pact in Nov meeting

11 November 2004 03:10  [Source: ICIS news]

NEW DELHI (CNI)--India and the Association of South East Asian Nations (Asean) members are expected to sign a trade liberalisation agreement during the trade negotiations committee (TNC) meeting on 30 November at Vientiane in Laos.

 

The pact will specify implementation of early harvest programme (EHP) that envisages import tariff reduction on 105 chemical, industrial and agricultural products.

 

According to Indian official sources, TNC has already finalised the phased elimination of tariffs on EHP items. The committee is expected to finalise the guidelines shortly. The tariff reductions on these products are expected to be launched on 1 January 2005.

 

The EHP is a major aspect of the Framework Agreement on Comprehensive Economic Cooperation between India and Asean signed in October 2003.

 

EHP is the first step towards achieving the long-term objective of forming India-Asean Regional Trade and Investment Area (RTIA) that would include a free trade area (FTA). TNC is slated to complete FTA negotiations on goods by 30 June 2005.

 

The tariff reductions under FTA will be launched on 1 January 2006, leading to complete elimination in case of all ASEAN members by 2016.

 

FTA framework provides for differential treatment by India for different members. India and certain Asean Members such as Singapore and Malaysia would eliminate tariffs in 2011. The FTA negotiations in the fields of services and investments will commence in 2005 and conclude by 2007.

 

The EHP list comprises 105 agricultural and industrial products on which both sides have to exchange tariff reductions. The list includes benzene, paraxylene, phthalic anhydride, monomethyl ethers of ethylene glycol or of diethylene glycol, cyclic polymers of aldehydes, esters of methacrylic acid, nitrites, iodides and iodide oxides, calcium carbonate, sorbitol, quinol and its salts, benzoic acid, its salts and esters’ amino-alcohol-phenols, acyclic amides and specified group of dyes.

 

The progressive tariff reduction under EHP was to commence from 1 November 2004 and tariff elimination are to be completed by 31 Oct 2007 for India and six old members of Asean (Asean-6) and 31 October 2010 for the four new Asean members Laos, Myanmar, Vietnam and Cambodia.

 

The EHP also has a separate list of 111 products on which India has agreed to grant tariff concessions to only new Asean members. The chemicals in this list are few and include phosphoric acid and polyphosphoric acids, phosphides, lysine and its esters and salts thereof and pharmaceuticals.

By: Naresh Minocha
+65 6780 4359

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