India's Commerce Secretary Rahul Khullar has, in a conversation with The Hindu here, outlined the current state of affairs in trade talks with some key East Asian countries.
On India's current Comprehensive Economic Cooperation Agreement (CECA) with Singapore, he said trade has grown at a compound rate of 30 per cent annually on both sides over the last five years. Trade in services has been a little slower on the off-take front. Singaporeans want to renegotiate something on investment. Investment flows are entirely one-way in India's favour. You need to come to grips with this problem of getting a two-way flow of investment going before we start talking about a more ambitious agenda.
On the prospects of a comprehensive economic pact with Malaysia Mr. Khullar said in ASEAN (Association of South East Asian Nations), Malaysia is less defensive about services: more open to the idea that competitive services can be provided by India. On goods, I think that Malaysian Government's perception is not anchored in one product like palm oil. Any pact has to be balanced, with some degree of equity.
On the delay in clinching an economic partnership with Japan, he said there were lots of sticking points. We need much greater clarity in market access for our pharmaceutical generics. And, these have to be commercially meaningful. I don't think there is a zero-sum game as between Japan and South Korea in market access in India: the market segmentation will enable both Korea and Japan to access India in different areas, without necessarily competing with one another. There will be some areas where Sony and Panasonic will compete with LG and Samsung.
On the outlook for a free trade pact with China, Mr. Khullar said “We have a very large trade deficit with China — already in excess of $23 billion a year. This deficit is just not economically sustainable. We need to provide reassurance to Indian exporters that there will be a level-playing field in China. We have given to China a list of things we need to get done. Let us give them three to six months. We are not mercantilist about this. If it is just that India is producing something which the Chinese economy doesn't want. I accept that. But China's rules are so arranged for protecting domestic industry. When you have that sort of a situation, then perception problems arise.
