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Trade deals set to open new era for Asean, India
Publication Date : 30-12-2012
India's "Look East" policy appears to have gained crucial momentum following the recent Asean-India Summit in New Delhi, marked by state visits by all but one of the Asean leaders.
Indian Prime Minister Manmohan Singh, who hosted the December 20 summit, hailed the conclusion of negotiations for the Asean-India Trade in Services and Investment Agreements at the summit as the latest milestone in economic cooperation between the two major trading partners.
Prime Minister Yingluck Shinawatra was among the nine Asean leaders who took part in the 20th Commemorative Summit in the Indian capital. All 10 Asean leaders except the president of the Philippines were present at the summit, which was followed by the flag-down of the Asean-India car rally in New Delhi on December 21.
India and Asean countries will sign the historic comprehensive Free Trade Agreements (FTAs) covering goods, services and investment around August 2013.
Each of the 10 Asean member countries' parliaments will have to ratify the Asean-India FTAs. Thailand's Parliament is expected to do so in April.
"The signing of these agreements will facilitate further economic integration between Asean and India, and also contribute to the overall East Asian economic integration," according to the Vision Statement issued following the summit.
India is currently Asia's third largest economy after China and Japan in terms of purchasing parity. Singh said the annual trade volume between India and Asean was expected to rise from this year's US$80 billion (2.4 trillion baht) to US$100 billion in 2015 and to US$200 billion in 2020 as India looks towards Asean for closer economic cooperation.
Within the Asean-India FTA framework, there is a combined market of almost 1.8 billion people, with India's population totalling 1.2 billion and Asean's population around 600 million, as well as a combined GDP of US$3.8 trillion.
"In the context of economic globalisation and regional integration, we are committed to advancing economic cooperation and engaging the emerging regional economic architecture, including organising multi-sectoral strategic economic dialogues," the post-summit statement read.
"We are committed to promoting private sector engagement and encouraging business-to-business relations, including through establishing a necessary framework to strengthen private sector engagement and public-private partnership linkages.
"Recognising the important role of Small and Medium Enterprises [SMEs] in the region, we are also committed to encouraging collaboration in the SME sector."
Asean and India are also supporting sub-regional developments, including the Mekong-Ganga Coopera-tion and Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Coopera-tion frameworks.
Other frameworks supported include the Brunei-Indonesia-Malaysia-Philippines-East Asean Growth Area, Cambodia-Laos-Vietnam Development Triangle Area, Indonesia-Malaysia-Thailand Growth Triangle, Greater Mekong Sub-Region and Asean Mekong Basin Development Cooperation.
Indian Foreign Minister Salman Khurshid said in an interview that the latest summit represented a crucial "take-off" point for connectivity between India and Asean countries.
He cited the three-nation highway project linking India's northeast with Myanmar and Thailand as an example of land-transport connectivity.
Additional sections of the 1,300-kilometre highway near India's border with Myanmar and the Myanmar border with northern Thailand are under construction and will be joined with the existing route in Myanmar, where road conditions will be improved.
The cross-border highway is scheduled for opening in 2016.
The Indian foreign minister also cited the potential linkages of India's Chennai seaport with other ports in Asean countries, especially the planned Dawei port in Myanmar and Thailand's Laem Chabang deep-sea port as another example of connectivity between India and Asean countries.
From Thailand, the highways and seaports could be further linked with those in Laos, Cambodia and Vietnam, whose ports are in the South China Sea.
Yingluck said the Thai government would also support extending the trilateral highway to reach Laos and Cambodia.
At present, India and Thailand have a limited FTA in goods covering 84 items. Bilateral trade is worth about US$9 billion per year.
The two countries are negotiating a much more comprehensive economic cooperation agreement covering trade in goods and services as well as investments to further upgrade economic ties.