Vientiane (Laos): India today (Nov 28, 2004) said a full fledged Free Trade Agreement (FTA) with Thailand may take some time to come into operation due to complexities in the tariff structure.

"Talks are progressing well and given the complexities of the tariff structure in the two countries, it may take some time before a full fledged Free Trade Agreement is operational between India and Thailand," commerce secretary S N Menon told reporters on board the special plane carrying Prime Minister Manmohan Singh to Laos for the third India-ASEAN (Association of South East Asian Nations) summit.

He said a part of the agreement with Thailand known as 'Early Harvest Scheme' was already in force from September 1 this year.

Negotiations are on to bring down tariff on various items including agricultural products, he said adding FTAs were in various stages of negotiations with ASEAN countries.

With Singapore, Menon said the negotiations were already in an advanced stage and it may be concluded within a year. "The focus for India would be investment in infrastructure."

So far Sri Lanka is the lone country with which India has an FTA.

India's sustained efforts to engage with ASEAN in the last one decade have shown commensurate results with the ASEAN-India trade last year touching $ 13 billion, an increase of about 450 per cent over the 1993-94 trade figures.

India's exports to ASEAN are $ 4.85 billion while imports account for about $ 8.15 billion. Still there remains significant potential to further expand these ties, official sources said.

At the second India-ASEAN business meet held in Delhi and Mumbai, the Prime Minister had set the target of $ 15 billion by 2005 and $ 30 billion by 2007 for India-ASEAN trade.

India mainly exports oil meals, gems and jewellery, meat and meat preparations, cotton yarn, fabrics, machinery, rice, drugs and pharmaceuticals and chemicals and imports mainly artificial resins, plastic materials, natural rubber, wood and wood products, organic chemicals, edible oils and fertilisers.

ASEAN countries, particularly Malaysia, Singapore and Thailand are also increasingly investing in India in crucial sectors such as telecommunications, fuels, hotel and tourism services, heavy industry, chemicals, fertilisers, textiles, paper and pulp and food processing.

Tariff elimination/reduction shall be completed by Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand and India by October 2007 and by Cambodia, Laos, Myanmar and Vietnam by October 2010.

In addition, India has also given unilateral tariff concessions to Cambodia, Laos, Myanmar and Vietnam on 111 items, the sources said.