With Pranab Mukherjee leaving the finance ministry for the presidential job, the fate of a GoM constituted in 2009 to address the concerns of plantation sector in the India-Asean Comprehensive Economic Cooperation Agreement (CECA) hangs in balance. The GoM could never meet since 2009.
The GoM?s, headed by finance minister Pranab Mukherjee, inability to discuss the issue was despite concerns flagged by states like Kerala over the country losing competitive edge to other nations in major commodities like pepper, tea and coffee. The GoM job was ?to expeditiously recommend appropriate measures, including structural reforms in vulnerable areas such as tea, coffee, pepper and plantations?.
CECA had sought eliminating duties on 4,000 items by 2016 and covering 80% of India?s imports from the South-east Asian nations.
However, as many as 489 items were kept out of the pact, keeping in view the concerns of vulnerable domestic industries and agricultural producers.
The main areas of differences revolved around sensitive agricultural products, mainly in the plantation sector, covered under the CECA.
Concerned over the issue, Kerala MP KN Balagopal told FE, ?The issue stands on the same ground as it was in 2009, it was being conveyed to us that a suitable solution will be provided after discussions and negotiations between states and the Centre. But so far, neither such talks have been initiated nor any step has been taken.?
Given that Indian tariff is generally higher than Asean nations, CUTS ? a non-governmental organisation pursuing social justice and economic equity ? said that India has relatively less to gain from this trade in goods agreement. Of course, India has to gain a lot from the services component of the pact, which Asean doesn?t seem too keen on.
?India?s average tariff rate in agriculture is about 34% against 13% for Asean. Likewise, India?s average MFN tariff for manufacturing goods are 11.5% compared with 7.5% for Asean,? CUTS said.
According to various trade estimates, India is one of the largest consumers and producers of spices, and accounts for 48% of spice trade in volume and 44% in value. Kerala alone contributes 92% of pepper exports, 74% of cardamom and 63% of ginger, making 67.5% of total national spice exports.