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From the President’s Desk…..
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My Dear Fellow Exporters,
Ever since India lost its major trade partner Soviet Union after the end of the Cold War period, it is looking towards South East Asia to compensate for its trade shortfall. India-Asean trade has since seen a spectacular year-on-year rise and has grown from USD 13.25 billion in 2003-04 to USD 30 billion in 2006-07. Yet, a vast potential still remains untapped. There is good market for Indian products like oil-meal, gems & jewellery, meat & meat products, cotton yarn, fabrics, engineering goods, marine products, and fruits & vegetables in this fast growing region of the world. Exporters on their part are trying to penetrate further by meeting the challenges of price, quality and delivery schedule, but only an FTA between India and Asean could provide the much needed impetus to our trade with this region.
Negotiations for the FTA are on, but as our Hon’ble Prime Minster
concedes, demands are being made on India that could impact a large number
of its farmers. "Some demands are being made with regard to some
sensitive agricultural products that can adversely affect our subsistence
farmers and certain crops," said the Prime Minister on way to attend
the 6th India-Asean Summit in Singapore recently. All the same, he is
hopeful that the two sides would be able to remove irritants and the FTA
would soon see the light of the day. And perhaps that’s why he sets an
ambitious bilateral trade target between the two sides at 50 billion dollar
for 2010 from the current trade of 30 billion dollar.
The Framework Agreement for a Comprehensive Economic Cooperation Agreement (CECA)
envisaging free trade in goods and services between India and ASEAN was
signed way back in October 2003. But since then, the negotiations have moved
at snail’s pace. India is under pressure to reduce import tariffs on
highly sensitive items such as palm oil, tea, pepper and coffee.
Incidentally, these items are being grown mostly in the Left governed states
of Kerala and West Bengal, which is another challenge for the Congress-led
government at the Centre.
India has offered to bring down the import duty on refined palm oil to 60%
against the 30% demand made by Indonesia and Malaysia. On tea, coffee and
pepper, India has offered a duty of 50% against the demand of 40% made by
countries like Vietnam. Getting these countries on board without inviting
the wrath of coalition partners is an uphill task for the Central
Government. Will the Prime Minister succeed in containing regional
aspirations for a much larger national cause is not known; but he certainly
needs to reflect similar courage as in the case of nuclear deal. And without
this, his long cherished dream of one market from Himalayas to Pacific would
never come true.
Meanwhile, India has negotiated bilateral CECA with Singapore and is in the
process of negotiating a Free Trade Agreement with Thailand. It is also
expected to commence negotiations with Malaysia for the same, but probably
Malaysia would be the toughest nut to crack.
Yours
sincerely,
Ganesh Kumar Gupta
PRESIDENT
