Saturday, August 30, 2008

FREE TRADE AGREEMENT BETWEEN INDIA AND ASEAN

India and ASEAN have agreed to sign a free trade agreement in December 2008.The FTA between India and ASEAN is expected to boost bilateral trade to $50 billion by 2010 from the present level of $35 billion. It took six long years for two sides to conclude the negotiations as the talks tripped several times over issues like RULES OF ORIGIN(R.O.O)and market opening by India for 5 sensitive agricultural products including tea,coffee,palm oil and pepper.
While R.O.O issue was sorted out some time back,the talks kept getting stuck on the levels of tarrif reduction on 5 products especially crude palm oil and refined palm oil.
An agreement on palm oil duties was finally reached in early August 2008 after India decide to improve its offer in CPO to 37.5% and RPO to 45% over its offer of 43% and 51% respectively,made in january this year.
India has also agreed to lower duties on coffee and tea to 45% and pepper to 50%.
Under the pact,India and ASEAN will eliminate import duties on 71% products by December 31,2012 and another 9% by 2015.Duties on 8-10% products that have been kept in the sensitive list will also be brought down to 5%. India will keep 489 items in the negative list of products to be excluded from tarrif reduction commitments.

Sunday, August 24, 2008

NSE Trading In Currency Futures

NATIONAL STOCK EXCHANGE has announced the launch of trading in currency futures from 29th august 2008. For the first time in India, it would now be possible to trade on the currency futures on a stock exchange platform.
Currency futures are standardised foreign exchange contracts traded on a recognised stock exchange to buy or sell one currency against another on a specified future date,at a price specified on the purchase or sell date. Currently RBI has approved only USD-INR currency futures to be traded on the approved exchanges.
The size of the contract would be $1000 and they would expire on the last business day of any month at 12 noon. The contracts will be quoted and settled in rupees and the settlement price of the contract would be RBIs reference rate on the last trading day.