Thailand and India are engaged in negotiations to conclude a Free Trade Agreement (FTA) covering trade in goods by 2010. The FTA covering trade in goods would lead to long term mutual benefits in trade and investment and the partnership would be expanded further to cover technology know-how and expertise. However, the FTA seems to have reached difficult juncture, as India is not keen on eliminating import tariffs as sought by Thailand on several chemical and petrochemical items under the proposed free trade agreement (FTA) between the two countries.
Thailand has sought complete tariff elimination on as many as 28 items after the FTA comes into forces. Only silicon dioxide, among these 28 items is not being produced in India. All the other items including organic chemicals, inorganic chemicals and dyestuffs are being produced in substantial quantities and totally catered to domestic markets. In addition, Thailand has also asked for tariff reduction to 5% by 2010 on phenol and dextrin.
The chemicals and petrochemicals ministry is of the opinion that these items are being manufactured in India in large quantities. The ministry also feels that negotiations of the FTA should be carried out in the context of the recently notified policy on petroleum and petrochemical investment regions (PCPIR). Any duty reduction from the current level of 5% on major polymers and plastic processed articles, as sought by Thailand,