India has implemented a free trade pact with Indonesia that slashes import duties on thousands of products, like seafood, chemicals and apparel. This takes the FTA with the 10-nation Asean bloc a step further. In turn, Indonesia would also slash import duties on Indian goods.
Now that the trade pact with Indonesia has come into force, the agreement signed with the Association of Southeast Asian Nations (Asean) bloc in 2009 has become functional with six member countries.
Besides Indonesia, the other five countries with which India has operationalised FTAs are Vietnam, Myanmar, Malaysia, Singapore and Thailand.
While India and the Asean grouping signed a Free Trade Agreement (FTA) on goods in August, 2009, it was to be separately notified by New Delhi for each member country.
The notification bringing the FTA with Indonesia into force from October 1 was issued by the Central Board of Excise and Customs (CBEC).
A commerce ministry official said that FTAs with the remaining four Asean members of Asean, Brunei, Cambodia, Laos and the Philippines, are also expected to become functional in the coming months.
Indonesia accounted for $11.7 billion out of total bilateral trade of $44 billion between India and Asean countries in 2009-10.
India and Asean are also engaged in negotiations to broadbase the FTA by liberalising the services and investment regime.
Commerce ministry officials said talks for the proposed pact on services and investments were at an advanced stage.
Prime minister Manamohan Singh is scheduled to visit Vietnam to participate in the India-Asean Summit later this month.