India, Indonesia close to sorting differences in ASEAN FTA

Tag : indonesian exporter
New Delhi, Jun 29 (PTI) India is believed to be working out a tradeoff with Indonesia on palm oil, the last hurdle to a Free TradeAgreement that New Delhi has been negotiating with ASEAN forseveral years.
The trade off, however, may harm interest of India's exporters oftextile and few other top traded items which may be denied accessto the Indonesian market in return for the Indian palm oil turfbeing defended.

Palm oil is the single largest export item for Indonesia and it hadbeen resisting the ASEAN-India FTA on the ground that the agreementshould pave way for opening the large edible oil market in India.

Though India has lately scrapped duty on crude palm and soya oilbecause of inflationary pressures, it wants to retain an option toprotect the domestic growers as and when the commodity cycleresults in surpluses at home.

"We are almost near settling the issue of palm oil and weexpect the FTA to be signed by late July or early August inJakarta," an official said.

Indonesia is coming round to India's stand of maintaining 40-45 percent protection level for palm oil in return for New Delhi allowingJakarta to restrict its market for few Indian products by puttingthem in the 'highly sensitive list'.

Along with Indonesia, India had differences with Malaysia which notonly sought higher market access for palm oil but also wanted toexport crude oil to India at zero duty over a long period of time,as the FTA would provide for.

However, India has assured only Brunei of zero duty for its crudepetroleum and not Malaysia. "For Brunei, crude oil is the onlyexport item. This is not so with Malaysia," the official said.

India had signed a framework agreement with the 10-nation ASEAN inOctober 2003 for the trade pact, which was to be concluded in 2006.PTI