CEBU, Philippines (AFP) -India is prepared to discuss an open skies policy with Southeast Asia in a bid to boost travel and strengthen economic ties, Prime Minister Manmohan Singh said.
With the two sides still locked in discussions over a planned free-trade agreement aimed at being concluded by July, Singh said liberalised air travel could help the bloc’s plans for an eventual vast common market zone.
“Greater connectivity is also central to the idea of regional economic integration,” Singh said at a summit with the leaders of the 10 Association of Southeast Asian Nations (ASEAN) on Sunday.
He recalled that during the last ASEAN summit in Malaysia in 2005, Singapore Prime Minister Lee Hsien Loong proposed a study on an open skies policy.
“We have examined this proposal and I am happy to announce that we would be willing to engage ASEAN authorities in a discussion on such a policy,” Singh said. ASEAN is looking to create a free-trade zone by 2015.
The prime minister also urged both sides to expedite negotiations for a July signing of a free-trade agreement, which was held up after India proposed a long list of products to be exempted from tariff cuts.
The “exclusion list” has been pruned to 490 and accepted by ASEAN, Indian Commerce Secretary Kamal Nath told reporters. Exclusion lists from both sides should not be more than five percent of total trade.
But India will seek to exclude palm oil from the list of products whose tariffs should be cut to between zero and five percent from 2011.
Palm oil, which accounts for about 20 percent of India-ASEAN annual trade, is among four products labeled as “highly sensitive”, meaning tariffs would remain for about five years and then gradually ease until 2018.
India’s annual palm oil imports from Malaysia and Indonesia are worth 1.7 billion dollars a year.
“We want to exclude palm oil because of our own domestic price,” Nath said. “For any trade agreement to work, it has to respect the sensitivities of all the parties to the trade agreement. It must be a win-win situation.”
ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.