India, Asean to push services, investment deal
Senior economic officials from the Association of South-East Asian Nations (Asean) and India would be meeting on June 24-25 in an effort to push forward the much-awaited services and investment agreement, stuck for many years over the issue of temporary movement of people.
Commerce secretary Rahul Khullar would be leading the Indian team for the negotiations, scheduled in Kuala Lumpur. The deal is expected to be signed by December.
An agreement on goods was signed in 2009 and implemented in January 2010. Once the services and investment deal is signed, the pact would be referred as the India-Asean Comprehensive Economic Partnership Agreement (CEPA).
“This issue had been more or less addressed, as we have told them India is only interested in temporary movement of people. Some of the Asean countries do not offer citizenship, so there is no question of being insecure,” a senior commerce department official told Business Standard.
Eight countries — Singapore, Indonesia, Malaysia, Vietnam, Brunei Darussalam, Laos, Thailand and Myanmar — of the 10-nation Asean bloc have ratified the goods agreement. The remaining two, Cambodia and Philippines, have indicated they would ratify it soon.
The services and investment agreement was expected to be concluded last year. However, Vietnam, Thailand and the Philippines were especially concerned at India’s expertise in various sectors such as telecom, information technology, hospitality and health care, among others, with a qualified English-speaking human resources pool.
India is the 10th largest services exporter in the world, while Asean is a net importer. The services sector accounts for 55 per cent of India’s gross domestic product.
Last year, during the India-Asean summit in Hanoi, Prime Minister Manmohan Singh announced visa-on-arrival facility for citizens of Cambodia, Vietnam, Philippines and Laos. He also emphasised the need to hasten finalisation of a free trade agreement in services and investment with Asean.
India and Asean have set the objective of increasing bilateral trade to $70 billion by 2012 from $50.3 bn last year.
India is vigorously looking for newer pastures to sell its produce, with growth and demand both plummeting sharply in the traditional destinations of the US and Europe.