Finance minister Pranab Mukherjee will visit Saudi Arabia by the end of this month. The tricky issue of polypropylene (which has been one of the biggest hurdle in the India-GCC FTA) will be discussed along with other issues during the joint commission meeting in Riyadh on October 31.
According to senior officials, ?The government has imposed duty on polypropylene which will be in place till early 2010, and will be then up for review depending on the global product dynamics and its movement across various markets. This has been a issue of concern during the India-GCC FTA negotiations.?
The senior officials accompanying the finance minister are expected to talk with Saudi officials about this as well as on issues relating to labour, and setting up of a full fledged management cum training institute for training Saudi youth in hospitality sector.
Top-level talks will take place in Riyadh in an effort to set up a new labour agreement between Saudi Arabia and India. The two-day Saudi-Indian Joint Commission meeting will initiate talks on labour issues leading to the signing of uniform labour agreement with Saudi Arabia.
India has been proposing an agreement with the Gulf Cooperation Council (GCC) to protect the rights of the millions of workers it has in the region and has recently signed a similar agreement with Bahrain.
Later this year the India-GCC FTA talks will take place in Muscat, Oman, where commerce and industry minister Anand Sharma accompanied by an official delegation is expected to have the next round of talks which had been stalled due to several problems including Polypropylene products and labour related issues.
India is also seeking investments from the Gulf region in the infrastructure sector, these include ports, roads and other brown projects, said officials.
India has been seeking greater safeguards for its chemicals and petrochemicals industry. This is being done with a view to protect domestic players.
?If the FTA could be formalised between the two sides both would stand to benefit as it would remove restrictive duties and push down the tariffs on goods being traded between the two sides,? officials pointed out.
The next India-GCC summit will discuss issues relating to current global financial meltdown and FTA. Such an FTA is aimed at giving a new fillip to their thriving two-way non-oil trade. On his earlier visit to the Gulf Prime Minister Manmohan Singh had discussion with Oman on FTA issue, which will takeover the chairmanship of GCC in November.
Besides Oman, GCC comprises of UAE, Saudi Arabia, Kuwait, Qatar and Bahrain. Of the three components of FTA, broad understandings on investments and services sector have been reached with Oman. However, Oman wants time to examine duty concessions on trade of goods between the two nations.
The FTA is expected to remove restrictive duties, push down tariffs on goods and pave way for more intensive economic engagement between the nations. The GCC is India?s second largest trading partner and the largest single origin of imports into India and the second largest destination for exports from the country.