India signs Trade in Services & Trade in Investments Agreement with ASEAN

 The Dollar Business Bureau | @TheDollarBiz   India has formally signed the Trade in Services & Trade in Investments Agreement with the Association of Southeast Asian Nations (ASEAN), a move that is expected to boost economic ties between India and ASEAN. Members of the ASEAN bloc include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam. All the ASEAN members except Philippines have signed the agreement. India’s Ministry of Commerce says that Philippines is completing its domestic procedure and it is expected to sign the agreement soon. India had signed Trade in Goods Agreement with ASEAN in 2009, which became effective from 2010. The Indian government says that the Trade in Goods Agreement has helped boost trade between India and ASEAN significantly in the past four years. According to the Ministry of Commerce, India’s trade with ASEAN stood at around $55.9 billion in 2010-11, which grew about 31% to around $73.3 billion in 2013-14.

Source - India's Ministry of Commerce

ASEAN is a key region for India under its Look East Policy. ASEAN and India have set bilateral trade target of $100 billion by 2015. The bilateral trade target with Indonesia, Thailand, Myanmar and Vietnam is $25 billion, $13.4 billion, $3 billion and $7 billion respectively. India’s Ministry of Commerce says that the Services Agreement will facilitate movement of both professionals and investments between India and ASEAN. “This will help provide commercially meaningful market across in ASEAN for our professionals, including those from the IT/ITeS sector,” says the MoC. India is keen to attract investments to help the economy recover. According to the Confederation of Indian Industry (CII) projections, India needs investments of Rs.280 lakh crore (about $4.7 trillion) during the next five years (2014-19) to help achieve an average growth of 7% per year. This is almost double the estimated Rs.139 lakh crore (about $2.9 trillion) that was invested in the last five years in India. India is also negotiating the Regional Comprehensive Economic Partnership Agreement (RCEP) with ASEAN and other FTA partners (Australia, China, Japan, South Korea and New Zealand).  

This article was published on September 10, 2014.