India now demands enhanced mkt access to Asean members

NEW DELHI: India has demanded that Asean countries should provide improved market access to 783 items including key manufactured goods like auto parts. The enhanced market access sought by India is not only in the form of tariff reductions, but also involves removal of non-tariff barriers. A number of agriculture products are also part of the list which has been submitted to Asean, government sources said.

It is felt that the move will prove a level-playing field to India which has been facing internal resistance over the Asean FTA from various sections, including Congress president Sonia Gandhi who wants the government to be cautious on the impact of liberal imports on farmers. Indian auto industry has also been raising concerns over impact of duty concessions to Asean countries under the FTA.

Sources said that while the FTA envisages elimination of duties on most goods over a period of time, imports could be still impeded by non-tariff barriers like stringent standards and conditions attached to imports. For instance, conditions like compulsory use of indigenous components could serve as a big disincentive for the automobile industry.

The Indian side has also said that negotiations on trade in services should be started this year itself and completed by the middle of 2008. Asean has been saying that negotiations on services and investment could be started only after concluding the FTA negotiations on trade in goods.

There is strong political pressure to negotiate a balanced agreement with Asean, the sources indicated. The feeling within the government and political circles is that too much market access is being given to Asean without reciprocal benefits for India. The argument in favour of strategic geo-political reasons should not overtake pure economic considerations, they feel.

Asean has been demanding that duty reduction under the FTA should be speeded up, moving faster than the initial milestones.

However, many of the Asean members have not met the stipulations laid down so far in terms of limiting the exclusion lists to 489 tariff lines and 5% of import value, the sources added. Thailand, Vietnam, the Philippines, Myanmar and Cambodia have not fulfilled this criteria so far. India has already met both stipulations in the revised offer that has been finalised.

Malaysia, Thailand and Laos have not even submitted their revised lists so far. Similar is the case with trade and tariff date which was submitted by India on August 7, 2007. These details have not been provided by Asean members, except Malaysia.

Some Asean countries have retained a large number of products in their sensitive and highly-sensitive lists, the sources said. As compared to 542 tariff lines in sensitive list by India, Indonesia has 601, Laos 611 and the Philippines 935. India has only 5 items on the highly-sensitive list as compared to 354 in the case of Vietnam and 20 in the case of Indonesia.