News 11 Feb 13 INDIA, ASEAN FINALISE FTA IN SERVICES AND INVESTMENTS

INDIA, ASEAN FINALISE FTA IN SERVICES AND INVESTMENTS

·         A valuable milestone in our relationships, says Manmohan Singh.

·         Agreement may be signed in August next.

·         Trade to reach $ 100 billion by 2015.

India and the Association of South-East Asian Nations (ASEAN) on December 20, 2012 finalised the much awaited Free Trade Agreement (FTA) in services and investments. The more is likely to boost trade to $ 100 billion by 2015

"It gives me great pleasure to see that our commemorative summit... coincides with the conclusion of negotiations for the FTA in services and investments. This represents a valuable milestone in our relationship. I am confident that it will boost our economic ties in much the same way the FTA in goods has done," Prime Minister Manmohan Singh said in New Delhi while addressing the ASEAN India Commemorative Summit in New Delhi on December 20, 2012.

After operationalizing FTA in goods last year, both sides were engaged in widening the base of the pact by including  services  and investments.

At present, trade between India and ASEAN stands at $ 80 billion. Dr. Singh said that following the simple mentation of FTA in goods, trade grew by 41 per cent in 2011-12 "Two-
way flows in investments have also grown rapidly to reach $ 43 billion over the past decade. As ASEAN investments into India have multi-
plied, ASEAN countries too have emerged as major destinations for Indian   companies.   From   energy resources to farm products, from materials to machinery, and from electronics to information technology, Indian and ASEAN companies are forging new partnerships of trade and investment," he remarked.

Commerce and Industry Minister Anand Sharma said that it was a matter of great satisfaction that India and ASEAN had been able to conclude the services and investments agreement.

Besides FTA with ASEAN, India is negotiating similar market opening pacts with members of the grouping. India has already implemented FTA with Singapore and Malaysia and is negotiating with Indonesia and Thailand in this regard. The FTA would also pave the way for discussions on a regional comprehensive economic partnership (RCEP) that ASEAN plans to seal with its six key trade partners, which include India.

India had been demanding that ASEAN open up its service sector further, including  steps  to  cover independent  professional  services and contractual service suppliers at all levels. It is learnt that after a tough round of negotiations on December 19, India agreed to drop its request for independent professional services and as a trade-off, ASEAN dropped its request for prudential measures in financial services. The final legal documents on services and investment pact is likely to be given a further shape by February 2013, and the signing could take place in August next year during a consultation between ASEAN economic ministers and Indian Minister for Commerce and Industry Mr. Anand Sharma in Brunei Darussalam.

ASEAN   and   six   partners— Australia, China, India, Japan, South Korea and New Zealand—will start first-round talks on the RCEP next year, which are expected to form the world's economic bloc in 2015.