India, Asean to seal FTA in services

The summit is expected to culminate in a vision document which will be based on recommendations from the Eminent Persons Group. After the plenary Thursday, there will be a ceremonial flag-down of the Asean car rally by the leaders of the Asean countries, Syed Akbaruddin, spokesperson of India's external affairs ministry, told reporters here Tuesday.

Prime Minister Manmohan Singh will host lunch for visiting leaders on Friday.

This is the first time India will be hosting a summit with the 10-nation Association of Southeast Asian Nations (Asean) on its soil.

The showpiece of the summit is expected to be the announcement of the conclusion of negotiations on a free trade agreement on services and investment.

"Tomorrow (Wednesday) is the ministerial meeting where we would be able to finalise the last leg of our negotiations on the Asean-India free trade agreement on services and investment," Indian Commerce Minister Anand Sharma said while inaugurating the second India-Asean business fair.

Trade ministers of all Asean member nations were present on the occasion.

Added Cambodian Commerce Minister Cham Prasidh: "We may be able to give you good news tomorrow."

"It will be a game-changer for the nature of economic relations between the two zones," said Indonesian Trade Minister Gita Wirjawan.

Services and investments were the two remaining "pillars" of the India-Asean economic cooperation after the existing FTA on merchandise goods was signed in 2009, Sharma said.

Sharma said the existing FTA in goods with the southeast Asian grouping that came into effect in 2010 had yielded rich dividends by way of a 30 percent rise in annual trade that could touch $100 billion by 2015.

"We are aiming that the trade between the two sides will touch $100 billion by 2015."

Currently, the trade between India and Asean is at $80 billion.

India is also negotiating a market opening agreement bilaterally with the members of the bloc.

Srirat Rastapana, director-general in Thailand's department of International Trade Promotion, said talks between India and Thailand for the market opening accord may be concluded by next month.

"We are at the last leg of negotiations. We started with early harvest scheme. FTA will help to drive the economic relationship bilaterally," he said.

The latest FTA is expected to pave the way for talks on the Regional Comprehensive Economic Partnership (RCEP).

Wirjawan said the FTA in services would be announced at this week's Asean-India Commemorative Summit, although its implementation could take up to a year.

Giving a big boost to India's Look East policy, Manmohan Singh will hold bilateral talks with the leaders of Indonesia, Malaysia, Laos, Vietnam and Cambodia on the sidelines of the two-day commemorative summit.

Taking advantage of the presence of nearly all heads of state/governments of Asean countries except Philippines which will be represented by its vice president, Manmohan Singh has decided to engage in intense bilateral diplomacy with individual Asean nations.

In November, he had met the leaders of Singapore, Thailand, the Philippines, Brunei and Myanmar in the Cambodian capital Phnom Penh.