Boost for Look East Policy

The ‘Look East’ Policy received a big boost with leaders of the South-East Asian countries agreeing to an Indian proposal for Free Trade Agreement (FTA) on five per cent of the total trade turnover, said Indian Commerce and Industry minister Kamal Nath. After attending the India-ASEAN Summit meeting which was preceded by a meeting of the ASEAN Economic ministers, he said, the contentious issue of FTA was discussed where both sides agreed to the Indian proposal of FTA against five per cent of trade.’

Admitting that some areas could have high negative list, Nath said that India has proposed that tariff should be fixed at the 2005 level. He said that taking into account the sensitivities of both side, an agreement could be arrived at by July, 2007.

Elaborating on the India-ASEAN trade statistics, the Commerce minister said that tea, pepper, rubber and crude and refined palm oil fall under India’s highly sensitive list, while 490 items fall under the exclusive list. Infact, 20 per cent of India-ASEAN trade accounts for US dollars 1.7 billion worth of palm oil. ‘We are offering 90 per cent of existing trade to ASEAN countries, but they are asking for more concessions,’ Nath added.

Replying to a question from this correspondent on discussion on development of Communication corridors between India’s north-east and the ASEAN countries, Nath said that a number of agreements have been arrived at to develop road and rail facilities as part of India’s ‘Look East’ policy with the ASEAN countries.

Earlier Prime Minister Manmohan Singh held bilateral discussions with the Phillipines president Gloria Arroyo, where the Prime Minister stressed on the importance of restarting negotiations on the contentious FTA issue, saying India was willing to negotiate but the structural flaws in global trade should be removed. He called for protection of the livelihood and security of farmers in developing countries.

Leaders of the ASEAN have endorsed the discussion and progress made during the India-ASEAN summit and expressed the hope that an agreement could be arrived at during 2007.

India’s ‘Look East’ Policy which was initiated a decade back is likely to gain momentum once an agreement is arrived on the FTA issue. Over the years there has been significant increase in trade, investment flows, economic cooperation and growing people to people interaction.

India’s export to ASEAN countries went up from 2.24 billion US dollars in 1999 to 10.41 billion US dollars in 2005-06. Similarly, Indian imports witnessed a jump from 4.63 billion US dollars in 1999 to 10.88 billion US dollars during the same period. The total trade turnover has also risen significantly from 6.87 billion US dollars in 1999 to 21.29 billion US dollars. It is expected that the figure would reach 30 billion US dollars by 2007-08.

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