In November 2001, the Prime Minister of Thailand and the Prime Minster of India agreed to set up a Joint Working Group (JWG) to undertake a feasibility study on a Free Trade Agreement between India and Thailand.
During the visit of Indian Prime Minister to Thailand, a Framework Agreement for establishing Free Trade Area between India and Thailand was signed by the Commerce Ministers of the two sides on 9th October, 2003 in Bangkok, Thailand. The Framework Agreement also provides for an Early Harvest Scheme (EHS) under which common items of export interest to the sides have been agreed for elimination of tariffs on a fast track basis. The EHS items were finalised in consultation with the apex Chambers and Ministries / Departments concerned. The EHS list has been finalized through negotiations based on full reciprocity in terms of trade value between India and Thailand. For the period 2001-2002, exports to Thailand on the EHS items amounted to US$ 33.3 million while imports from Thailand during the same period were to the tune of US$ 38.5 million. The highlights of various components of the Framework Agreement are as follows:-
Negotiations to commence in January, 2004 and concluded by March 2005.
Establishment of Free Trade Area (zero duty imports) by 2010.
Negotiations to commence in January 2004 and concluded by January 2006.
Both sides have agreed to have a common list of items for exchange of tariff concessions.
Tariffs on these items will be phased out in 2 years timeframe starting from 1st March, 2004. Since the two sides were not able to finalise the Interim Rules of Origin in time, the implementation of the EHS had to be deferred.
The tariff concessions on 82 items of EHS list began from 1.9.2004 with the signing of the Protocol between India & Thailand on 30th August, 2004 in New Delhi.
India Thailand Trade Negotiating Committee (TNC) has been constituted to carry forward the programme of negotiations as per the Framework Agreement. Four meetings of the TNC have been held so far.
Negative list for the second phase FTA has been drawn up. Lists have not been exchanged. February deadline missed. It might take another month or two.
Rules of Origin negotiations are on.
