ASSOCHAM study says tariff barriers may hit ASEAN business prospects

26 Sep '05

4 min read

While Singapore will emerge as a major trade partner for India in the ASEAN in services, banking and legal profession, its trade prospects in other ASEAN countries such as Thailand, Malaysia, Indonesia, Philippines and Vietnam will suffer significant jolts because of protective measures both tariffs and non-tariffs which these nations are unlikely to lift until FTA between India and ASEAN is executed by 2012.

These findings have been revealed in a Study conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) on `India-ASEAN FTA : Business Complimentarities, Trade Advantages & Rules of Origin' which has been submitted to the Ministries of Commerce and Industry and Finance.

Though India and ASEAN signed FTA in 2003 and the former has already started rationalising its tariff structure by bringing them down from 40% to 20%, Thailand, Malaysia, Indonesia, Philippines and Vietnam have not responded as was desired in rationalising their protective measures against India's exports to them in areas like transport and electrical equipment, copper products, polyethylene, textile products, cement, rubber, tea, steel, dairy products and refined sugar etc.

Releasing the Paper, ASSOCHAM President, Mr. Mahendra K. Sanghi pointed out that ASEAN members like Malaysia, Indonesia, Philippines , Vietnam and Thailand continue to impose tariff barriers on the aforesaid items of Indian exports ranging from 17.6% to 47.6% and in textile and watchessegment, the tariff exceed even 50%, while on an average India's tariff structure against these countries does not exceed 20%. In such a scenario, it will be extremely difficult for India to accelerate its trade prospects with these countries, added Mr. Sanghi.

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