India moves toward ASEAN free-trade deal

India moves toward ASEAN free-trade deal

Reuters, Singapore

India will sign a framework agreement with the Association of
South East Asian Nations (ASEAN) at its summit next week, leading
to a full free trading area within a decade, the Financial Times
said on Thursday.

The pact was negotiated over the last year and would be signed
with the 10-member group at the annual summit, set for Bali in
Indonesia next week, Indian Foreign Minister Yashwant Sinha told
the newspaper.

"We are getting much more deeply engaged in southeast Asia,"
he was quoted as saying in an interview in London. "This will
certainly boost our trade and economic relationship with the
region."

Progress on negotiating the framework agreement with ASEAN had
been unusually rapid by Indian standards, signaling the
importance of the deal as India has watched China's trade with
ASEAN grow dramatically over the last decade, it said.

ASEAN also wants to counterbalance China's growing economic
clout in the region by boosting ties with India. Indian exports
to ASEAN were US$4.8 billion last year, just eight percent of
total exports.

"If we have regional trading agreements with ASEAN, they will
become beneficiaries of lower tariffs with India," Sinha said.

India has been criticized for helping to bring about the
collapse of the trade talks in Cancun last month, and critics say
it sets higher tariffs on developing country imports than Western
ones.

Asean, which groups Brunei, Laos, Cambodia, Indonesia,
Malaysia, Myanmar, the Philippines, Vietnam, Singapore and
Thailand, will hold its annual summit on Oct. 7 and 8.