19/11/2007 (Houston Chronicle), Singapore — Southeast Asian officials Monday urged India to make further tariff concessions on agricultural products and petroleum to end a deadlock in talks to create a free trade area.

India's Commerce Minister Kamal Nath will meet his counterparts from the 10-member Association of Southeast Asian Nations on Tuesday to seek a compromise ahead of their leaders' summit on Wednesday, officials said.

India and ASEAN were supposed to sign a free trade pact in January but negotiations stalled over India's refusal to budge on tariffs on five key items: petroleum, palm oil, pepper, tea and coffee.

"Since we cannot agree, we've put it on hold until we can find a way forward. Unless India can come up with a more progressive way forward, we'll just wait," said Indonesian Trade Minister Mari Pangestu.

"We would like to see solid cooperation from India, and more flexibilities to move (talks) faster," said Philippines Trade Secretary Peter Favila.

India is keen to widen trade ties with ASEAN but face opposition in opening up sensitive sectors such as agriculture which provide livelihoods to millions of Indians.

Trade between India and ASEAN reached nearly $20 billion last year and is projected to surge to $30 billion by 2010 under the proposed pact, officials said.

Last year, India offered to cut tariffs on crude palm oil from ASEAN to 50 percent from 80 percent and for refined palm oil to 60 percent from 90 percent by 2018.

But Malaysia and Indonesia, which jointly supply 70 percent of India's edible oil, want a reduction in tariffs to 30 percent for crude palm oil and 40 percent for refined palm oil, officials said.

Vietnam and Thailand are also seeking more tariff concessions for black pepper, tea and coffee, officials said.

At the same time, Brunei wants India to cut duties on petroleum, its main export item.

Tariffs are already low at 5 percent but Brunei wants further concession so it could benefit from a free trade pact with India, said a senior ASEAN trade official, who asked not to be identified by name due to protocol.

"We have substantially concluded negotiations but there is a stalemate on these two key issues," the official said.

Officials said India wants to include liberalization of services and investment in the pact.

ASEAN nations are initially not ready to do so until the two parties wrap up talks on opening up trade in goods, but may agree to the request to push talks forward, officials said.

Indian officials were not immediately available for comments.

India is seeking to deepen its engagement with ASEAN to ensure it is not left out as the grouping is negotiating free trade pacts with China, Japan, South Korea, Australia and New Zealand.