NAY PHI TAW: The Philippines, the only country in the 10-nation ASEAN to sign a Free Trade Agreement for services and investments with India, today assured that the internal processes for inking the ambitious bilateral pact was underway.
The assurance was given to Prime Minister Narendra Modi by Philippines President Benigno Aquino during their bilateral meeting on the sidelines of the India-ASEAN and East Asia summits here.
India has formally signed the long-pending pact with the other nine Southeast Asian nations – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand and Vietnam.
Modi in his address to the 12th India-ASEAN summit yesterday had urged that the FTA on Service and Investment be brought into force “at the earliest”.
The services agreement will open up opportunities of movement of both manpower and investments. The pact will allow India to leverage its competitive edge in the areas of finance, education, health, IT, telecommunications and transport.
This will be especially helpful for balancing India’s deficit with ASEAN countries in trade of goods. The India-ASEAN agreement on trade in goods was operationalised in 2010.
It seeks to liberalize trade in services and bilateral investment, building on their existing free trade agreement (FTA) for goods and covering a combined population of 1.8 billion.
The current India-ASEAN trade is around USD 81 billion and a target of USD 100 billion has been set for 2015.
The FTA will help provide a commercially meaningful market across ASEAN for India’s professionals, including those from the IT/ITeS sector.
The deal was signed by India in New Delhi after Commerce Minister Nirmala Sitharaman cancelled her visit here on August 26 to initial the pact as she was preoccupied with the launch of the inclusive banking scheme, Jan Dhan Yojana.
The deal has instead been signed by circulating the text around the countries involved.
Once implemented, the new deal will help reinforce ASEAN’s centrality in the regional trade architecture. The regional bloc also recently agreed to enhance its existing FTAs with China, a much larger trading partner than India, Australia and New Zealand. . All these developments could have implications for progress on the Regional Comprehensive Economic Partnership (RCEP), the “mega-trade pact” which includes the ten members of ASEAN and its FTA partners India, China, Japan, South Korea, Australia and New Zealand.
India is negotiating a RCEP Agreement with ASEAN and its partner countries, which, once signed will become the most dominant free trade area globally.
Modi had also noted that the RCEP Agreement can be a springboard for economic integration and prosperity in the region.
“However, we should aim for a balanced agreement which is beneficial to all, and, is truly comprehensive in nature, by equally ambitious agenda with similar timelines for goods and services,” he had said.
India’s trade with ASEAN is just three per cent of total ASEAN trade and there remains immense untapped potential. –PTI
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