India, Asean negotiations on services, investment FTA

Tags: Economy
India will press for an early conclusion of a pact with Southeast Asian nations for mutual opening of trade in services and liberalisation of investment norms when Asean officials visit here next month for talks.

India and the 10-nation Asean bloc already allow each other free market access in merchandise trade since January 2010.

The two sides had then agreed that they would widen the scope of the free trade pact by including services, the mainstay of the Indian economy.

However, the negotiations for opening trade in services and investment are facing hurdles as some of the Asean members like the Philippines, a strong player in the global outsourcing, are not enthusiastic about the pact.

"Association of Southeast Asian Nations (Asean) officials will be here sometime during the middle of October. Both the sides would try to resolve the contentious issues," a Commerce Ministry told PTI.

The two sides have already held ten rounds of talks without a breakthrough.

The services sector is of key interest to India as it contributes over 55 per cent to its GDP.

The sector has also emerged as an important area for export earnings. The country is looking at expanding trade with the Asean in several services, including banking, insurance, health, accountancy, architecture and engineering.

During the April-July period this fiscal, the country's cumulative exports of services amounted to $44.74 billion.

The talks, likely to be attended by Prime Minister Manmohan Singh, are taking place ahead of India-Asean Summit in Bali in November.

Both India and the Asean wanted the talks to conclude by the end of this year.

A Ficci-Deloitte study has said that once the agreement comes into effect, Indian entrepreneurs would get considerable opportunities in services like telecommunications, radio, television, consultancy, architectural, legal, accounting, education, health and social work.

The ASEAN countries are Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Thailand, Singapore and Vietnam.

India-Asean trade in 2010 stood at $50.33 billion. Both the sides aim to take it up to $70 billion by 2012.

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