India targets $50 billion trade with ASEAN; hopes to seal free trade deal by March '08

Mumbai: India has set a $50 billion annual trade target with the 10-member Association of Southeast Asian Nations (ASEAN) and has proposed a simplified visa regime for businessmen to travel between India and ASEAN countries.

Addressing the sixth India-ASEAN summit in Singapore, Prime Minister Manmohan Singh set an ambitious bilateral trade target of $50 billion by 2010. He also announced an initial contribution of $6 million to promote projects relating to climate change and enhancing cooperation in science and technology among these nations.

"India has a stake in ASEAN`s stability and prosperity just as we believe ASEAN has a stake in the transformation that India is experiencing," he told ASEAN leaders.

An Asian economic community consisting of an integrated market linked by efficient road, rail, shipping and air services, supported by a robust institutional architecture, would create an "arc of advantage" for regional cooperation and action, he said.

In consultation with industry representatives, India would formulate a simple criterion for the issue of visas to bona fide businessmen to travel from India to ASEAN and vice-versa the same day, the prime minister said.

With differences over preferential access confined only to a handful of products, India hopes to conclude a long-awaited free trade agreement (FTA) with ASEAN early next year, commerce secretary G K Pillai told a news conference on the sidelines of the summit.

Both sides have agreed to settle these issues by March 2008 with a view to concluding the FTA in goods by May 2008, he said.

He said the issues now pending for settlement included differences over tea, coffee and pepper that are almost wholly exported to India only by Vietnam from the 10-member ASEAN grouping, and palm oil, which is produced by Malaysia and Indonesia.

The two sides had agreed upon what is known as a normal list, under which 80 per cent of goods would attract zero tariffs over a period of time, and also a sensitive list, where 5 per cent of tariff rates would apply.

Under the negative list, there will be no tariff cuts on 489 items. These cover just 5 per cent of the India-ASEAN trade.

Pillai said the differences have narrowed considerably and India has shown more flexibility in negotiations with ASEAN.

China, meanwhile, has concluded a FTA in goods with ASEAN and is negotiating one on services. Similarly, Japan and South Korea had concluded FTAs on goods and services respectively with ASEAN.