02/01/2008 (The Bangkok Post) - India-Asean free trade talks are scheduled to resume next week and, if all goes well, a deal will be concluded in March and signed by June after missing earlier deadlines, according to Thai authorities.

Asean officials will meet their Indian counterparts in Bhopal, India, from Monday to Wednesday, with the focus on lists of highly sensitive products, according to Chana Kanaratanadilok, deputy director-general of the Trade Negotiations Department.

Asean asked India to cut import tariffs for the highly sensitive list to 30-40% from 70-80%, but India bargained for 50-60% to protect its industries.

Negotiations between Asean and India started four years ago and a free trade pact was supposed to have been signed in January 2007. But negotiations stalled over India's refusal to budge on tariffs on five key items: petroleum, palm oil, pepper, tea and coffee.

Last year, India offered to cut tariffs on crude palm oil to 50% from 80% and for refined palm oil to 60% from 90% by 2018. But Malaysia and Indonesia, which supply 70% of India's edible oil, want a further reduction to 30% for crude palm oil and 40% for the refined product.

Vietnam and Thailand are also seeking more tariff concessions for black pepper, tea, coffee and petroleum products. As well, Brunei wants India to cut duties on petroleum, its main export item.

Trade between India and Asean was worth nearly US$20 billion last year and is projected to reach $30 billion by 2010 under the proposed pact.

India has also sought bilateral deals with some Asean states, including Thailand, Indonesia and Malaysia, but there has been little headway except for the "early harvest" tariff cuts on 82 items with Thailand, which started in 2003.

The early harvest pact helped expand trade between the two countries by more than 125% since 2003, to an estimated $4 billion in 2007.

In the first 10 months of 2007, Thailand's exports to India were worth US$2.24 billion, up 54.5% year-on-year, and imports totalled $1.753 billion, resulting in a trade surplus of $485 million.

The main Thai export goods are steel, television sets, automobiles, machinery, chemical products and textiles while imports are mainly jewellery and precious stones, silver, gold, metals, chemicals, fresh and frozen aquaculture products, and medical tools.

According to Mr Chana, Thailand is hoping to begin renegotiating the terms of the proposed FTA with India later this month.