The Association of Southeast Asian Nations (ASEAN) and India have signed a long-awaited free trade agreemen

BANGKOK, Aug 13 (TNA) – The Association of Southeast Asian Nations (ASEAN) and India have signed a long-awaited free trade agreement (FTA) which would take effect next year and increase trade between ASEAN and India to US$60 billion within seven years, according to Thai Commerce Minister Pornthiva Nakasai.

Under the agreement, ASEAN members and India will abolish import tariffs for more than 80 per cent of their total imported goods between 2013-2016, while import tariffs for sensitive goods will be reduced to 5 per cent in 2016.

Mrs Pornthiva said after six year of negotiations, the ASEAN-India FTA was signed by the ASEAN Trade Ministers and its Indian counterpart during the 41st ASEAN Economic Ministers Meeting (AEM) in Bangkok on Thursday which was considered a successful step of ASEAN to tie up trade relations with India and its population of 1,100 million people.

The Indian economy is of similar size to China, Japan and South Korea, countries with which ASEAN has already signed FTAs, she said.

The commerce minister said she was confident that the ASEAN-India FTA would be an important mechanism to boost trade and investment between ASEAN member countries and India.

It was also good timing for the FTA as it could give a positive signal to the world community that ASEAN and India have the strong determination to foster free trade system, she said.

“It is expected that trade between ASEAN and India will increase to US$60 billion within seven year or 2016 after the trade volume in previous year was US$47 billion. Among ASEAN countries, Thailand ranks forth in export market share to India after Singapore, Malaysia and Indonesia,” said Mrs Pornthiva.

It is expected that trade between Thailand and India could hit US$10 billion after the implementation of the FTA next year, she said.

The FTA agreement will enable member countries to reduce tariffs from January 1, 2010, onwards, she said, adding that Thai export products which would benefit from the agreement include automotive components, gemstones and ornaments, telecommunications equipment, electrical appliances, furniture and cosmetics.

The signing of the FTA will open South-East Asian markets for Indian exporters reeling from the shrinking of their main markets in the United States and Europe during the global economic slowdown.

Trade negotiations with the 10-nation ASEAN began in 2001 but was delayed several times due to the differences over issues like the list of restricted goods, duty cuts on farm products including palm oil and rules related to value addition. After negotiations concluded in late 2008, new differences arose on the methods of breaking customs’ barriers.

ASEAN comprising Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Vietnam, Lao, Myanmar and Cambodia. (TNA)