Friday, December 11, 2009

Points to Remember 2009 - Free Trade Agreement with India

India-ASEAN Free Trade Agreement:
ü  India and the ASEAN (Association of South-East Asian Nations) signed a FTA on August 13, 2009 which took nearly six years to negotiate.
ü  Nine members of the 10-nation (ASEAN) regional trade bloc signed the pact except Vietnam. Vietnam would do so after its formal recognition by India as a ‘market economy’.
ü  Under this FTA, India & ASEAN member countries will lift import tariffs on more than 80% of traded products between 2013 and 2016.
ü  This FTA is related only to Goods.
ü  489 items from agriculture, textiles and chemicals products are kept out of duty reduction.
ü  India, ASEAN target $ 10 billion increase in trade in the first year (1st Jan 2010 to 1st Jan 2011) from $ 40 billion at present.
ü  ASEAN regional bloc is India’s fourth largest trading partner.
ü  At present, China is India’s Largest Trading Partner followed by US, UAE.
ü  The implementation of the FTA will take effect from Jan 1st 2010.

India-South Korea Sign Trade Pact:
ü  India and South Korea signed a trade pact on August 7th 2009 which took three and half years to negoiate.
ü  The pact known as the Comprehensive Economic Partnership Agreement (CEPA).
ü  The CEPA, a term adopted to stress comprehensive economic relations inclusive of merchandise and service trade, investment and economic cooperation, is a de facto free trade agreement (FTA).
ü  The pact, which will see India eliminating or reducing import duties on 85 percent of Korean exports and South Korea doing the same for 93 percent of imports from India by 2019.
ü  Bilateral trade between the two countries was worth $15.56 billion in 2008.

      Apart from these two, India have signed a FTA with Srilanka in December 1999, Thailand (Separate from recent FTA with ASEAN) in Oct 2003, Malaysia (Separate from recent FTA with ASEAN) in 2005.

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