Seeking to widen the scope of the free trade agreement (FTA) in merchandise goods, India will seek fast tracking of the agreement with the ASEAN bloc for opening of trade in services and liberalisation of investment norms.
A team of ASEAN officials is scheduled to visit New Delhi during middle of this month to hold talks on further progress of the talks which have been hanging fire for the last one and half years due to reluctance of some ASEAN countries including Philippines on opening the services sector. India and the 10-nation ASEAN bloc already allow each other free market access in merchandise goods.
With services being the mainstay of the Indian economy, India is keen for concluding the talks as early as possible. Philippines, a strong player in the global outsourcing, is not enthusiastic about the services pact which has made its conclusion difficult.
The two sides have already held ten rounds of talks without a breakthrough and effort this time around would be deal with the contentious issues in order to arrive at some kind of understanding to pave way for an early pact. The services sector is of key interest to India as it contributes over 55 per cent to its GDP.
The services sector has emerged very strong for export earnings for India. India is looking at expanding trade with the ASEAN in several services including banking, insurance, health, accountancy, architecture and engineering. During the April-July period this fiscal, the country's cumulative exports of services amounted to $44.74 billion. The talks are being held before the India-ASEAN summit to be held in Bali, Indonesia in November in which Prime Minister, Manmohan Singh is likely to take part. India and ASEAN are keen that the talks should be concluded by the end of this year.
A recent FICCI-Deloitte study has said that once the agreement comes into effect, Indian industry would get considerable opportunities in services like telecommunications, radio, television, consultancy, architectural, legal, accounting, education, health and social work. The ASEAN countries include Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Thailand, Singapore and Vietnam. India-ASEAN trade in 2010 stood at $50.33 billion. Both the sides aim to take it up to $70 billion by 2012.
