Indo-Thailand FTA to cheer up consumers

Indian consumers can look forward to cheaper television sets, auto parts, cordless telephones, ceiling fans, air conditioners and other mech...

Indian consumers can look forward to cheaper television sets, auto parts, cordless telephones, ceiling fans, air conditioners and other mechanical and electrical items. Thanks to the Early Harvest Scheme (EHS), signed between India and Thailand, custom duties on 82 identified items coming from Thailand will be reduced by 50 per cent from Wednesday.

The impact of the customs duty reduction may not be felt immediately as the reference date for calculating the 50 per cent duty reduction is January 1, 2004 (in the interim period rates have come down for many items). However, in the medium-term the impact would be significant as the duties come down further by 75 per cent from September 1, 2005 and 100 per cent from September 1, 2006.

It’s not only Indian consumers who will benefit. Thai consumers can also look forward to Indian mangoes, apples, wheat in addition to mechanical and electrical goods from India.

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According to officials on both sides, it’s going to be a win-win situation for the people of both countries and as well as entrepreneurs as they will have access to goods at competitive prices. This logic, however, provides only cold comfort to the industry. Electronic companies, television manufacturers and original equipment manufacturers (OEMs) will have to readjust their business strategies with a view to facing the ensuing competition which begins from tomorrow and will become more fierce in the medium term.

Under the EHS, which comes into effect from September 1, 2004, entrepreneurs from both the countries can import and export 82 items freely subject to duties which will come down to zero in the next two years. These 82 items cover 7 per cent of the Indo-Thai trade which was $1.44 billion in 2003-04. The protocol to implement the EHS under the Framework Agreement on Free Trade Area (FTA) between the two countries was signed by commerce minister Kamal Nath and his Thai counterpart Watana Muangsook.

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