23/01/2008 (The Telegraph), New Delhi - India today expressed confidence that a free trade agreement (FTA) with the 10-member Asean would become operational by January 2009.

“We hope by March we will close the negotiations with Asean,” commerce secretary G.K. Pillai said. “Tariff will be down on 73 per cent of the items by January 2009,” he said.

India had signed a framework agreement for a trade pact with the Association of Southeast Asian Nations (Asean) in 2003.

However, differences persist between the two sides, mainly on import duty cuts on agricultural products such as tea, coffee, palm oil and pepper.

Pillai said similar trade pacts with the European Union, South Korea and Japan were being negotiated and India hoped to conclude these by the end of 2009.

Officials said the palm oil issue, which is the main sticking point, however, had not been sorted out.

While Asean has been insisting on an almost total reduction of India’s import duty on palm oil, India has proposed a gradual reduction of the tariff from the first year the FTA is implemented.

The duty could slide gradually to 50 per cent in 10 years, against 15 years under the earlier offer. The timeline for full benefits for both sides in respect of all agreed products would be 2018, the officials added.

They said in the FTA being negotiated with Asean, only pepper trade would be liberalised, while cardamom and coconut would continue to be on the negative list.