Trade remains sore point between India, ASEAN
Indonesia, Cambodia yet to ratify pact on services and investment signed in 2014
New Delhi, January 24
While all 10 leaders from the Association of South-East
Nations (ASEAN) have gathered in India to celebrate India’s 68th
Republic Day, two-way trade continues to remain a pain-point in the ties
even as both sides look at strengthening strategic ties.
India
and ASEAN signed the trade pact on services and investment in September
2014. However, out of the 10 member countries, two are yet to ratify
the treaty – Indonesia and Cambodia. In the case of Indonesia, it
believes that if it signs the agreement, then Indian professionals will
flood their markets, in other words, take their jobs away, sources told BusinessLine.
India
had been urging ASEAN countries – Singapore, Thailand, Malaysia,
Cambodia, Myanmar, Brunei, Laos, the Philippines, Indonesia and Vietnam –
to ratify and implement the services pact at the earliest as it
continues to get impacted by the free trade agreement (FTA) in goods,
sources said.
India and ASEAN had signed the goods
FTA in 2009 and it was implemented in 2010. However, under the pact
while imports from ASEAN countries have seen a rise, exports from India
to that region have not seen a significant jump.
During
his bilateral meeting on Thursday with Indonesian President Joko
Widodo, Prime Minister Narendra Modi is expected to raise this issue.
On
the other hand, Cambodia is not ratifying it because of its internal
legislative issues, said another official, involved in the talks.
“Indonesia
has always been wary of India flooding their jobs market. And this is
unlikely to change if one goes by their posturing in RCEP, which is in
limbo. The traditional market access issues with ASEAN remains. They
will continue to put India in tenterhooks unless India agrees to be
flexible in RCEP,” said Biswajit Dhar, Economics Professor, Jawaharlal
Nehru University.
All the 10 ASEAN countries are also
part of the China-led proposed mega trade pact – Regional Comprehensive
Economic Partnership (RCEP) – which also includes India, Japan, South
Korea, Australia and New Zealand.
However, India is
now looking at ASEAN more from the strategic perspective in terms of
maritime security rather than enhancing trade. This is crucial to
counter China as ASEAN seeks greater participation from India even as
they face Beijing’s expansionist policy in South China Sea.
“The
ratification will happen soon. However, the government is now more
focussed on maritime cooperation and security, especially in the
backdrop of India becoming a rising power in maritime links and rise of
the Indo-Pacific region,” said Prabir De, Professor, Research and
Information System for Developing Countries (RIS), and Coordinator,
ASEAN-India Centre (AIC), India.
This is
for the first time that all 10 leaders of the ASEAN region have
participated in the Republic Day celebrations as chief guests.
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'FTA in goods between India and Asean will boost trade
Press Trust of India, New Delhi, Jan 23 2018
Full implementation of the free
trade agreement (FTA) in goods between India and the Asean bloc will
help boost trade between the two regions, Minister of State for Commerce
and Industry C R Chaudhary said.
The minister
said however, connectivity and infrastructure are major challenges to
further push the trade ties between India and the Association of South
East Asian Nations (Asean).
India and the
10-nation bloc signed the FTA in goods in 2009. Under the pact, two
trading partners set timelines for eliminating duties on maximum number
of goods traded between the two regions.
The 10 Asean members are Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, the Philippines, Laos and Vietnam.
The
agreement has resulted in increase in trade, and "once the full
implementation of tariff (or basic customs duties) reduction scheduling
is done", it is expected to create more trade opportunities for both the
sides, he said at the Asean-India Business and Investment Meet and Expo
being held here.
Chaudhary said both the regions are working to improve connectivity and infrastructure to promote trade and investments.
"India
is working with Asean on multiple connectivity projects," he said,
adding that the country has made considerable progress in the
construction of trilateral highway -- India-Myanmar-Thailand.
He
also said that the Asean India maritime transport cooperation agreement
will help in enhancing cooperation and communication between the two
regions besides removing barriers for increasing maritime trade.
There is also a proposal to establish rail link between India and Vietnam.
India's
exports to Asean increased to about USD 31 billion in 2016-17 from USD
25.15 billion in the previous fiscal. Imports too grew to USD 40.61
billion in 2016-17 from USD 40 billion in the previous year.
The
commerce ministry said in a statement that the Asean -India expo is
showcasing products and services in areas including manufacturing,
engineering, ICT, healthcare, tourism, environment, agriculture, Science
& technology, logistics and retail.
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