Prime Minister Manmohan Singh responded to the urging of Association of South East Asian Nations (ASEAN) by promising to finalise the Free Trade Agreement (FTA) in services and investment before leaders from the 10-nation bloc arrive in Delhi next month for a summit with India.
Prime Minister of Singapore Lee Hsien Loong and President of Philippines Benigno Aquino, during meetings with Dr. Singh on Sunday, were the most recent to press for an early conclusion of a comprehensive FTA. India had signed the FTA in goods in 2009 and has since been negotiating its extension into the services and investment sectors.
Although Commerce and Industry Minister Anand Sharma rolled out figures to assert that trade with ASEAN was growing by leaps and bounds, the fact remains that the $75 billion in bilateral trade clocked last year was only 2.9 per cent of this block’s total trade. The FTA in goods also covers only 80 per cent of tariff lines compared with 90 per cent found in ASEAN’s FTAs with other countries.
“India is prepared to conclude the agreement on trade in services and investment promotion before the commemorative summit in Delhi in December. This will be a strong signal of our deepening economic engagement, and will allow for rapid expansion in trade and investment flows in both directions,” Dr. Singh said in his opening remarks at theIndia-ASEAN summit here on Monday. During his response statement later, he felt a comprehensive FTA would be the “springboard” for rapid expansion in economic relations with ASEAN.
With the U.S. backing the initiative, Dr. Singh said the India-Myanmar-Thailand highway would be operational by 2016, thus opening North East India to South East Asia.
He also spoke about another alternative route through central or north Myanmar to connect Guwahati to Hanoi. U.S. and Japan, at their recently held second trilateral meeting with India, had supported this initiative and the issue would be discussed in depth at their next meeting to be held in Washington.
“The route will be through virgin territory. With the big boys [Japan and the US] backing it, we would like to give the proposal a try,” said Government sources.
Dr. Singh also mentioned other India-ASEAN initiatives that tend to get eclipsed by more attractive initiatives.
These include the upcoming business fair in Delhi, a past meeting between the heads of space agencies in Bengaluru and a meeting of ASEAN economic ministers in Guwahati next month.
The Prime Minister’s assurance of across-the-board FTA with ASEAN by mid-December was welcomed by the Confederation of Indian Industry (CII) which pointed out that the two were among the biggest beneficiaries of the shift in global economic equations and should jointly leverage their large markets and development endeavours.