New Delhi: India on Tuesday sought the early conclusion of a free trade pact in services and investments between Asia’s third largest economy and the 10-member high-growth Association of Southeast Asian Nations (Asean).
The move will lead to further economic integration between the two regions, which have a combined population of about 1.8 billion, “a market with resource and demand”, foreign minister S.M. Krishna said in his remarks to the round-table of the Asean-India networks of policy research groups.
The round-table is one of many events being held in the run-up to a commemorative India-Asean summit on 20-21 December in New Delhi to mark two decades of apex-level ties between the two. Tuesday’s meet was organized by Research and Information Systems for Developing Countries think tank in New Delhi.
Expanding ties: Foreign minister S.M. Krishna
Krishna noted that India’s trade with the Asean, which groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, crossed the $70 billion (around Rs 4 trillion today) target set for 2011.
Recalling that India and Asean had signed a free trade agreement (FTA) in goods in 2009, Krishna said, “We would now like to see the early finalization of the Asean-India FTA in investment and services.” This will help kick-start talks on a regional economic partnership initiative resulting in further integration, he added.
Trade with India constituted just 2.9% of Asean’s overall global trade, said Nyan Lynn, deputy secretary general (political security community), Asean secretariat. He called on India to support and participate in Asean’s plans to improve connectivity in South-East Asia and South Asia.
Referring to an Asian Development Bank estimate, Lynn said Asian nations need to invest $3 trillion in overall infrastructure development between 2010 and 2020.
India is already in talks with Myanmar and Thailand for a trilateral highway. During a visit to India in January, Thai Prime Minister Yingluck Shinawatra suggested maritime links between Chennai in southern India and Thailand through the Dawei seaport in Myanmar.
“India’s engagement with Asean so far has been episodic. I think we need to step up engagement with the economically vibrant region. If India does not respond to Asean’s overtures, say, in the area of trade, Asean can turn to a China or Japan or South Korea. So it is in India’s interest to keep up ties with the group,” said C. Uday Bhaskar, an analyst with South Asia Monitor think tank in New Delhi.
India and Asean established preliminary ties in 1992— around the time India launched its “Look East” policy aimed at forging stronger ties with the fast growing economies of South-East Asia.
India was upgraded to a full dialogue partner of Asean in 1995, and in 2002, India and Asean held their first summit-level interaction.