Sunday, December 23, 2012

'Huge gains' in Asean-India FTA

Thai Prime Minister Yingluck Shinawatra foresees vast opportunities springing from the extension of the Asean-India free-trade agreement to cover services and investment, which should boost bilateral trade to US$100 billion by 2015 and to $200 billion within a decade.

Asean and Indian leaders yesterday reached a high level of agreement on participation in negotiation of deals covering trade, services and investment, paving the way for a comprehensive Asean-India Free Trade Area and creating favourable conditions for the two sides and partners to negotiate the Regional Partnership (RCEP), fostering linkages in the fields of air, sea and land transport, digital technology and the building of a Mekong-India Economic Corridor.

Yingluck, attending the Asean-India Commemorative Summit in New Delhi, said building and expanding linkages are important keys to the partnership between the two sides as sea, air and land networks will eventually increase trade and investment. Through the upgrade, all Asean members anticipate an increase in trade and services, she said. For Thailand, the Commerce Ministry has been instructed to draw up a new trade plan.

"The Asean leaders highly valued the effective cooperation that India has made with the grouping in strengthening regional connectivity and linkage and building an Asean Community," Yingluck said.

Closer relations with Myanmar and India will open doors wide for new trade routes, as Thailand is linked with the former's Dawei by land and with the latter's main port in Chennai by sea, she said at a meeting with Thai private-sector representatives. While Thailand should benefit from its strategic location in the region, Thai companies will be given new business opportunities, she said.

Yingluck noted that regional connectivity is the theme of Thailand's proposed 2.2-trillion-baht investment in infrastructure, which includes a road link to Myanmar. At the meeting, she said the government would next year draft a law to support the investment, to ensure that the plans would not be derailed by any political changes. Free-trade agreements aside, the infrastructure investment will help lift Thailand's competitiveness, she said.

To ensure the Thai public sector does not miss the boat amid regional integration, a public-private workshop will be hosted next year to brainstorm on issues relating to labour and education.

Vehicle to India

In the past year, the Foreign Ministry has been a major vehicle to facilitate Thai investment in India. It hosted a seminar with the Indian public sector, and a trade seminar in the south of the country. It also hosted a trip to Gujarat for Thai businessmen. Gujarat, a gateway to the rich, land-locked northern and central regions of the country, has been positioned at the head of India's march toward global economic superpower status with access to all major port-based countries.

Key obstacles that Thai companies have experienced in doing business in India include land ownership, licensing, visa applications and contributions to provident funds. Meetings with the Indian public sector and a trade seminar are proposed to address the issues.

India hosted the summit on Thursday and yesterday to mark the 20th anniversary of the Asean-India dialogue partnership and the 10th anniversary of the Asean-India Summit-level partnership. At the summit, the two sides also agreed to cooperate in developing small- and medium-sized enterprises, the development of human resources and finding solutions to challenges such as climate change, food and energy security, urbanisation, natural disaster management and fighting the drug trade.

India-Asean trade has grown more than 10 times in the 10 years since the annual summits began. After implementation of the FTA for goods, trade grew by 41 per cent in India's 2011-2012 fiscal year. Two-way flows in investment have also grown rapidly to reach $43 billion over the past decade.

Bilateral trade between Thailand and India in 2009 and 2010 totalled $4.67 billion. In those two years, India's exports were worth $178.75 billion while imports totalled $288.37 billion. According to, a business information centre, alternative energy, automobiles and auto parts are highlighted as the industries with the highest potential for Thai companies to invest in.

Yingluck said India's "Look East" policy and Asean's "Look West" policy were matching connectivity to mutual benefit. During the summit, the leaders adopted a Declaration of Vision to lift bilateral ties to a strategic partnership level. The document defines major directions for the development of the Asean-India relations and the effective and full implementation of their cooperation in various fields including politics, security, culture, society and development.- Asia News Network (December 22, 2012)

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