The much-awaited framework agreement on free trade among India and six other countries of the BIMSTEC economic grouping -- which clubs Bangladesh, India, Myanmar, Sri Lanka, Thailand and now Nepal and Bhutan together --appears to have run into rough weather with Bangladesh expressing unwillingness to sign it immediately and seeking special concessions.

At their two-day meeting, which began on Saturday, Commerce Minister Arun Jaitley and his counterparts from Thailand, Sri Lanka and Myanmar expressed readiness to initial the key agreement, which forsees reduction of tariffs to zero in a few years.

Bangladesh, however, expressed reservations about the tariff reductions and felt it was not yet ready to join the agreement.

Jaitley suggested that those countries who felt ready to join the Framework Agreement on Free Trade could do so and the others could join when they felt comfortable. His handling of the issue at the ministerial meet was appreciated by others including Thailand.

Later, Thai Foreign Ministry spokesman Sihasak Phuangketkeow told reporters that Bangladesh has indicated that it did not want to be an obstacle and has urged other members to sign it stating it would sign later.

Sources told PTI that Bangladesh has sought compensation or special concessions as it felt that reduction in tariffs would result in reduction in revenues.  The Thai spokesman indicated the draft agreement, which is widely expected to be signed tomorrow at the end of  the BIMSTEC meeting, could be signed during the first summit of the grouping, which Thailand has said could be held in July.

"Since the summit has been suggested by us for  July, there is more time for them (the other countries) to  join the Framework Agreement," the spokesman said. He added that if everyone signed it, the Agreement would carry more 'impact'.

The fate of the signing will remain in balance till the meeting concludes on Sunday as the issue is expected to figure again during the morning deliberations.  The spokesman said the members of BIMSTEC were keen to see everyone sign the  agreement. 

"The issue can be solved, there are ways and formulae,  we have not had time to discuss it," Sihasak said. Nepal and Bhutan joined the grouping formally only  yesterday and are expected to sign the Framework Agreement at  a later date.

Bangladesh was represented at the Trade Ministerial  meeting by a civil servant and not by its Commerce Minister.

In his opening remarks this morning, Thai Commerce  Minister Watana Muangsook stressed the need for setting up a more substantive and meaningful economic cooperation framework and declared that the draft of Framework Agreement had been  "finally completed" and was to be signed tomorrow. 

The ministerial meeting has approved to appoint Thailand as the Chair of the BIMSTEC trade negotiating committee and tasked the committee to finalise the Free Trade Agreement at the earliest. The talks on Free Trade Agreement will continue tomorrow.

In another development, India and Thailand will sign the vital Mutual Assistance in Legal Matters agreement tomorrow which will help in assisting investigation in criminal cases involving people from the two countries.

The decision was taken at a one-on-one metting between External Affairs Minister Yashwant Sinha and his Thai counterpart Surakiat.

India and Thailand have also agreed to start joint naval patrol but "format, frequency and timing of the patrol" have to be discussed, Thai Foreign Ministry spokesman Sihasak Phuangketkeow said. The two leaders, who held talks on a wide range of issues, including development and progress, also discussed crucial matters like combating the menance of terrorism, maritime security and trans-national crimes.

Sihasak said the two leaders had a "good meeting" and they also extensively discussed the issue of "Asian Bond 2" within the framework of the Asia Cooperation Dialogue.

 "India is expected to play a big role. We hope India will atttend the next ACD meeting in Chiangmai in Thailand. India had promised one billion dollars to the meeting. Thailand may match the figure," the spokesman added.

The two leaders discussed that the Asian Bond 2 will be in local regional currencies -- a basket of regional currencies like the yen, yuan, the rinbini and may be even the thai bhat. The Asian Bond 1 was in US dollars. "Asian Bond 2 will be a sovereign bond," the spokesman said.

He said the Thai Minister also asked Sinha to consider holding of the first summit of BIMSTEC  in July this year.