The talks are progressing well. Given the complexities of the tariff structure in the two countries, it may take some time before a full-fledged FTA is operational between India and Thailand, commerce secretary SN Menon told reporters on board the special plane carrying Prime Minister Manmohan Singh to Laos for the third India-Asean summit.
He said the early harvest scheme was already in force from September 1 this year. Negotiations are on to bring down tariff on various items including agricultural products, he said.
He added that FTAs with Asean countries were in various stages of negotiation.
With Singapore, Mr Menon said, negotiations are already in a advanced stage, and may be concluded within a year. The focus for India would be investment in infrastructure.
Right now, Sri Lanka is the lone country with which India has an FTA.
Indias sustained efforts to engage with Asean in the last one decade have resulted in Asean-India trade touching $13 billion last year, an increase of about 450% over the 1993-94 trade figures. Indias exports to Asean are $4.85 billion, while imports account for about $8.15 billion.
Still, there remains significant potential to further expand these ties, official sources said. At the second India-Asean business meet held in Delhi and Mumbai, the Prime Minister had set a target of $15 billion by 2005 and $30 billion by 2007 for India-Asean trade.
India mainly exports oil meals, gems and jewellery, meat and meat preparations, cotton yarn, fabric, machinery, rice, pharmaceuticals and chemicals. It imports artificial resin, plastic material, natural rubber, wood and wood products, organic chemicals, edible oils and fertiliser.
Asean countries, particularly Malaysia, Singapore and Thailand are also increasingly investing in India in crucial sectors such as telecom, fuel, hotel and tourism servivces, heavy industry, chemicals, fertiliser, textiles, paper and pulp and food processing.
From a negligible amount in 1991, cumulative approved FDI from Asean during January 1991 to may 1992 was over Rs 14,000 crore - 6.1% of total approved FDA in India.
For trade in services and investments, the negotiations on the respective agreements shall commence next year and be concluded by 2007. Tariff elimination/reduction shall be completed by Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand and India by October 2007 and by Cambodia, Laos, Myanmar and Vietnam by October 2010. in addition, India has also given unilateral tariff concessions to Cambodia, Laos, Myanmar and Vietnam on 111 items, the sources said.