The Cabinet on Thursday approved a free trade agreement (FTA) in trade and services with the Association of Southeast Asian Nations (Asean). The proposal was approved after a discussion between Finance Minister P. Chidambaram and Commerce and Industry Minister Anand Sharma.
“Though the Cabinet felt that the Finance Ministry’s objections to the free trade agreement were important, they were ultimately overruled as Prime Minister Manmohan Singh, Parliamentary Affairs Minister Kamal Nath and Law Minister Kapil Sibal collectively felt that the government must honour the prior commitment given to Asean at Bali,” highly-placed sources told The Hindu .
The Agreement on Trade in Services and Agreement is to be signed under the Comprehensive Economic Cooperation (CECA) between India and the Asean. The CECA between India and Asean was signed in 2003. The Cabinet approved the Agreement on Trade Goods under the CECA with the Asean in July 2009. The agreement the Cabinet approved on Thursday is aimed at boosting the movement of Indian professionals in the 10-nation Asean. Member countries include countries like Singapore, Malaysia and Indonesia.
The Cabinet had deferred a decision on the proposal last month after Mr. Chidambaram pointed out that the Commerce Ministry had not consulted the Finance Ministry over the agreement. The Finance Ministry has commissioned a study on the impact of the FTAs India has signed. “We feel that India has signed FTAs recklessly harming considerably the domestic industry, especially the manufacturing sector,” said highly-placed Finance Ministry sources.
The Agreement on Investment the Cabinet approved on Thursday would protect, promote and increase foreign investment flows into the country and also removes and barriers, said the sources.
The pact was to be signed in Bali earlier this month during Mr. Sharma’s visit to the Indonesian island for the Ninth World Trade Organisation (WTO) Ministerial Conference.
Mr. Sharma also informed the Cabinet of details of the Bali agreement. “The Cabinet approved the stand taken by India at Bali WTO meet and India is satisfied with this round of global trade talks,” Information and Broadcasting Minister Manish Tiwari told reporters.
