A Free Trade Agreement (FTA) between India and ASEAN covering investment and services has reached the last leg of negotiations and is likely be formalized on Wednesday, Dr. Cham Prasidh, ASEAN Chair and Senior Minister & Minister of Commerce, Cambodia, announced here today at the 2nd India-ASEAN Business Fair (IABF) & Business Conclave.
The three-day event, organized by FICCI in collaboration with the Ministry of Commerce & Industry at Pragati Maidan, has brought together business leaders, policy makers, investors, think tanks and entrepreneurs from across industries of the 10-ASEAN countries and India. This year, more than 250 exhibitors are participating representing ASEAN.
“The three pillars of the India-ASEAN economic relations are FTA in Goods (which was finalized in 2009 and came into effect in 2010) and in Services and in Investment. The delay in reaching a consensus on FTA in Services and Investment can be attributed to the fact that there were 10 nations having different issues and challenges, hence the complexities,” said Dr. Prasidh.
Anand Sharma, Minister of Commerce, Industry & Textiles (CITM), Government of India, pointed out that at present, trade between India and ASEAN stands at $80 billion and this trade should reach $100 billion by 2015. Developing technology and innovation hold the key to achieving this goal.
There are efforts being made to connect ASEAN nations and India via roads, ports and air. “East-West highway is part of that endeavor which will connect Thailand, India and Myanmar,” stated Mr. Sharma. He added, “This year also marks the completion of 10th commemorative summit and 20 years of business engagement between India and ASEAN. Since then, year-on-year trade growth has been 30% and two-way investment has now reached $73 billion.”
Gita Irawan Wirjawan, Minister of Trade, Indonesia and Srirat Rastapana, Director General, Department of International Trade Promotion, Thailand, said that their countries lack the necessary manpower, and they look to India for sharing not only its human capital but also its expertise in sectors such as IT, healthcare and services.
Dato’ G Palanivel, Minister in Prime Minister Department, Malaysia, appealed to the cash rich Indians to invest in Malaysia. “From 2002 to 2011, trade has increased six-fold between India and Malaysia and Malaysia is looking forward to invest in infrastructure projects in India. Both countries could look for business and investment opportunities in education, healthcare and Malaysia’s IT super corridor.”
The incoming Chair of ASEAN, Pehin Dato Lim Jock Seng, Second Minister of Foreign Affairs & Trade, Brunei, urged the private sector to take advantage of the business-friendly trade agreements between India and ASEAN. “We have been focusing on building connectivity through road, sea and air but It connectivity is equally critical,” he said.
Commenting on the delay of India and Singapore Comprehensive Economic Partnership Agreement (CEPA), Lim Hng Kiang, Minister of Trade & Industry, Singapore, said that CEPA is being reviewed because of the changes that have taken place recently. “We want to formulate an agreement which will help the business community, hence changes are being incorporated in view of new business developments. Once CEPA is concluded, it will enhance both trade and investment flows for both nations.
Vu Huy Hoang, Minister of Industry & Trade, Vietnam, invited India businesses to investment in manufacturing, energy, IT and food processing. By the end of this year, trade between India and Vietnam could reach $4 billion, which as of now stands at $3.5 billion.
Dr. Pwint Sann, Deputy Minister for the Ministry of Commerce, Myanmar, stated that trade volume will increase considerably if border posts are developed. Trade which is $1.3 billion has the potential to increase two to three times if border connectivity is developed.
Dr. Nam Viyaketh, Minister of Industry and Commerce of the Lao PDR and Felicitas Agoncillo-Reyes, Assistant Secretary, Department of Trade and Industry, Philippines, said that cooperation and integration of the ASEAN nations can lead to take trade and investment to the next level. Felicitas underlined that the effectiveness of FTA in Goods can be gauged from the fact that trade figures have tripled in the last three years in Philippines. We can look for partnerships in manufacturing, SMEs and energy.
Naina Lal Kidwai, President, FICCI, remarked that India-ASEAN trade has already surpassed the set target of $70 billion for the year 2012. India is the sixth largest investor in ASEAN nations. The trade numbers have been truly impressive between India and ASEAN but there is immense potential and this number can reach new heights with cooperation. Together, this potential can be transformed into realties. The private sector should come forward and help in strengthening the trade relation and accelerate the pace of economic growth.
Addressing the session on ‘Investment Opportunities in India’, S Jagathrakshakan, Minister of State for Commerce and Industry, Government of India, stated that talks between India and ASEAN on the Free Trade Agreement are in an advanced stage, “We are committed to enhance the level of economic cooperation with South East Asia, one of the most dynamic economic regions of the world over the past two decades.”
This Business Forum, he said was a tangible show of India’s commitment to deepen the engagement with ASEAN and “we will work to build mutually beneficial partnerships with domestic and foreign players, with the shared aim of enhancing economic wellbeing in India and partnering countries”, Jagathrakshakan said.
He said that the Government of India is committed to bringing in necessary policy changes to ensure 8% plus economic growth. “We also want to make it more inclusive. We have already taken a number of steps to foster knowledge-intensive growth in India, and to make it an attractive destination for foreign capital and technology.”
Dr. Anupam Srivastava, Managing Director, Invest India & Assistant Secretary General, FICCI, gave an overview of the outlook for the Indian economy, its inherent strengths of a middle class of 280 million people (to reach 567 m by 2025); its increased disposable income and changing lifestyle provides steady market for higher-end products and services and home to the third largest technical and scientific manpower pool in the world.
Frugal innovation in India, Dr. Srivastava said helps lower the cost of production, customizes products and services to suit value-conscious Indian market, and helps to sell in India and other emerging markets. There is emphasis on knowledge-intensive growth in manufacturing and service sectors, R&D hub; tech transfers; strong IPR; product & process patents and pragmatic support to enhance global competitiveness.
Invest India, he said was a unique platform to assist Investors across sectors and across regions, set up a “not-for-profit” joint venture between the Department of Industrial Policy & Promotion (Ministry of Commerce & Industry), State Governments of India, and Federation of Indian Chambers of Commerce & Industry.
As aptly put by Anand Sharma, “There is a need for promoting foreign investments in India in a structured manner and provide quality input and support services to the investors, particularly the SMEs and family-owned overseas enterprises. ‘Invest India’ would respond to this urgent imperative.”
Arun Kumar Bhatt, Managing Director, Madhya Pradesh, TRIFAC, spelt out the investment and business opportunities in the State in areas such as tourism, textiles, engineering & automobiles, agro & food processing, healthcare, infrastructure, IT & ITeS and skill development.
H V Raghuram, Managing Director, Karnataka Udyog Mitra, spoke on Advantage Karnataka and how the State was leading the way as an industry champion with the largest number of R&D centers in India, the largest software exporter in the country, largest biotechnology hub in India largest number of medical institutes and Industrial Training Institutes in the country, leading producer of horticulture products and the third largest number of engineering colleges in India.
M. Velmurugan, Executive Vice Chairman, Tamilnadu Industrial Guidance & Export Promotion Bureau and Pratap Madireddy, CEO, APInvest, gave similar presentations on the investment and business opportunities in the states of Tamil Nadu and Andhra Pradesh, respectively.
Kanesan Veluppillai, Group Chief Operating Officer, Scomi Group Bhd, Malaysia, shared his experience of a foreign company already operating in India.