India is considering providing assured market access through canalised imports for countries like Malaysia, Indonesia, Vietnam and Myanmar. This is aimed at breaking the impasse over coverage of "substantial trade" under the proposed framework agreement with Asean.
"India has proposed that it would be willing to canalise imports of items like crude palm oil, tea and pepper to ensure that these countries have assured market access in India," officials said.
New Delhi has ruled out a reduction in import duty on items like crude palm oil, tea and pepper as these are sensitive for the domestic agriculture industry.
The proposal was discussed during a recent meeting of senior officials from both sides at Kuala Lumpur. The issue would also be discussed at the next meeting of the Trade Negotiating Committee.
The commerce ministry will also table this proposal before the Trade and Economic Relations Committee headed by Prime Minister Manmohan Singh.
Negotiations on the proposed free trade agreement with Asean have been held up on insistence of Asean to cover 80 per cent of all trade under the concept of "substantial trade".
The problem has occurred in case of four countries, Malaysia, Indonesia, Vietnam and Myanmar, with regard to their main items of export like palm oil, tea, coffee, pepper and rubber. Since India is keen to retain these agricultural items on its negative list, coverage of trade for these countries barring these items would be less than 40 per cent in some cases.
Meanwhile, the domestic industry is sharply divided over the inclusion of plastics in the proposed sensitive list for Asean. While the smaller processed plastics industry wants to keep plastics out of the sensitive list, the larger producers of primary plastics like Reliance want to include plastics on the list.
The Chemicals and Plastic Manufacturers' Association representing the big primary plastic producers has pointed out that they need protection since the sector is capital and technology intensive, has huge cost disadvantages and faces lower duties of 5 per cent on polymers.
The Aditya Birla Group has also made a representation to the commerce ministry to retain viscose in the negative list for Asean.
UNCTAD, which has been mandated by the commerce ministry to finalise the sensitive list has, in its analysis, found out that only 10 out of 616 products in the chemicals and plastic sector were sensitive.Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Investments Discussion Group
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