New Delhi: After signing a free trade agreement that will eventually lead to duty-free commerce for bulk of the trade, India and the 10-nation Asean bloc are set to start talks for opening the crucial services sector.
“Negotiations for the free trade pact (between India and Asean) on services sector will begin soon,” said ambassador of Thailand Krit Kraichitti. He, however, said given the complex nature of issues involved among India and 10 countries of Southeast Asia, it would take about two years for the negotiations to conclude.
Services sector is of key interest to Indian economy as it contributes over 55% to the GDP.
It is also emerging as an important area for export earnings for the country. But the sector faces hurdles such as harsh domestic regulations, including those relating to visa, and the complex tax regime.
Noting that the services sector is “very important” to multiply trade and investment between Asean countries and India, the Thai ambassador said “safeguard measures” will have to be incorporated before finalising the pact.
“Services sector is very important. The pact will benefit all,” he said, but added that there would be safeguards built into the agreement, which will have to be “finalised carefully”.