Thai FTA aside, India looks to ASEAN

Post the Early Harvest Scheme EHS implementation, bilateral trade between the two nations has risen. In 2006-07 April-Sept, India8217;s exports to Thailand amounted to 697 million. India8217;s imports from Thailand were 1,211 million in 2005-06, a growth of about 40 per cent over the previous year.

As per the latest data available, the value of bilateral trade stood at 6.5 billion in 2007-08. Commerce minister Kamal Nath had earlier expressed hope that Indo-Thailand trade will reach the 10-billion mark by 2010. The Indo-ASEAN FTA, to be sealed in the next two months, has been held up since Indonesia and Malaysia want larger duty cuts on palm oil by India.

Earlier in June, no commerce and industry ministry official made it for the Indo-Thai Business Summit. An industry source in Bangkok said, 8220;India is keener on concluding the FTA with ASEAN. It gives the Indian side a much bigger role in southeast Asian trade. And, it is definitely better than signing individual agreements with individual southeast Asian nations.8221;

Reluctant to give details of the roadblocks impeding the conclusion of talks, industry sources said two key issues hampering it were taxation and value addition norms. In its negotiations with India, the Thailand government demanded lower taxes or tariffs on certain items.

8220;As a fall out of EHS in the prevailing FTA, the domestic industry has been affected by cheaper Thai import, particularly of white goods and electronics, against which the trade associations has sent a representation to the government. So the government is following a cautious approach,8221; the source added.

Though senior officials in the Thailand government claim negotiations are underway, there has been little progress on the ground. Secretary general in the board of investment, ministry of industry in Thailand, Satit Chanjavanakul said, 8220;We are keen to expand the current FTA to include at least 1,000 items.8221; He, however, expressed disappointment over the fact that India was close to signing an FTA with ASEAN, even though trade negotiations between the two nations were initiated much before that.

8220;We hope that Indo-Thailand CFTA is concluded first as the process was initiated from previous government8217;s time NDA.8221; Currently, the Indo-Thai FTA, operational for past two years, covers 84 items.

6.5 billion

Value of trade between India and Thailand so far in 2007-08

10 billion

Expected value of trade between the two nations by 2010

Several birds, one stone

8226;Sources said that as the government was pursuing an FTA with ASEAN, there was no reason to push for a trade deal with Thailand 8212; it already being a member of the association

8226;The ASEAN FTA, to be sealed in the next two months, has been held up as Indonesia and Malaysia want larger duty cuts on Indian palm oil