With talks between India and the Association of South-East Asian Nations (Asean) on a regional trade and investment area deadlocked over the issue of rules of origin, Prime Minister Manmohan Singh has asked Commerce and Industry Minister Kamal Nath to hold talks and sort out the differences.

Nath, who accompanied the Prime Minister to the fifth India-EU summit at The Hague, is holding meetings with senior Asean officials in Singapore. He is accompanied by a high-level delegation, which includes Commerce Secretary SN Menon.

India has sought a minimum 40 per cent value-addition norm, with change in tariff heading at the four-digit level. In addition, New Delhi has also sought minimum operation to ensure that at least some manufacturing activity was undertaken in the country of import.

Asean wants India to have just the 40 per cent value-addition norm, while New Delhi says it is willing to relax only one of the three requirements.

Prime Minister Manmohan Singh had, on November 2, convened a meeting with officials of the commerce and industry, finance and external affairs ministries to discuss the issue. It was felt that India should retain two of the three requirements under the rules of origin.

The prime minister asked the commerce and industry minister to hold discussions with Asean and submit a report by November 15.

According to senior government officials, Asean is insisting on just the condition of value-addition since other countries like China, with which it recently negotiated a free-trade agreement, have agreed to just one norm.

Officials point out that having just the value-addition norm with other conditions may open up the possibility of imports from other countries, like China, pouring into India and taking advantage of the free-trade agreement.

Sorting out the differences is important since the two sides are hoping to sign the protocol to implement an early harvest scheme during the third India–Asean summit, to be held on November 30 at Vietianne in Laos.