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Lao PDR Market Access Guide: Trading with ASEAN Dialogue Partners – India

Lord, Montague J. (2013): Lao PDR Market Access Guide: Trading with ASEAN Dialogue Partners – India.

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Abstract

Laos benefits from the ASEAN-India Free Trade Agreement in Goods (AIFTA) by gaining preferential access to the large Indian market. Under the Agreement, India commits to eliminating customs duties on imports for 90% of its tariff lines under two separate lists: one being completed by the end of 2013; the other, by end-of-2016. For products on the sensitive list, India’s tariffs are being reduced to no more than 5% by the end of 2016. For its part, Laos has until 2021 to eliminate tariffs on its normal and sensitive tracks.

How Lao Producers and Exporters Benefit from AIFTA

- Because India’s level of trade protection is over twice as high as in the ASEAN countries, Laos’ ability to bypass high tariffs gives it a particularly strong competitive advantage over non-AIFTA member countries.

- India’s average tariffs on agricultural products is 3.5 times higher than that of the ASEAN countries, making it extremely advantageous for India to buy agricultural products from Laos rather than from non-AIFTA countries.

- India’s logistics environment is relatively favorable to trading. It outperforms the average of other East Asian countries in quality of transport and IT infrastructure, logistics competence of officials, international transport costs, traceability of shipments, and timeliness of shipments. This type of logistics environment helps to facilitate transport of goods from Laos.

- India is one of the fastest growing markets in Asia. The country’s real import growth rate in the last few years has been substantially higher than that of the East Asian economies.

This study covers the operation of the Agreement and its parts related to rules of origin, opportunities of Lao businesses, how to gain access to the market, and useful contacts and resources.

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