A day ahead of the India-ASEAN Summit in Thailand, industry body Ficci has asked the 10-member bloc to liberalise services sector for a balanced outcome of a trading pact for breaking duty barriers between New Delhi and the regional body.
Ficci said under the agreement, dubbed as Comprehensive Economic Cooperation Agreement, India may source many products from ASEAN as there is a convergence between New Delhi's top 30 imports and the block's top 30 exports. On the other hand, top products imported by ASEAN are not exported by India.
India, represented by Commerce and Industry Minister Kamal Nath, and ASEAN will review the progress on signing the free trade agreement at a summit in Thailand tomorrow.
Negotiations on FTA were completed in 2008 but could not be signed because of differences arising at later stages. India is keen to expand the scope of FTA to services which account for over 55 per cent of its economy. The trade opening pact would be limited to merchandise goods initially.
"Even though negotiations on services are at initial stages, ambitious offers by ASEAN are necessary for ensuring a balanced outcome of the CECA ... As it would enable Indian services sector and professionals to leverage their competitive advantage," FICCI President Harsh Pati Singhania said.
The chamber said deep liberalisation in services by ASEAN vis-à-vis India would be critical as ASEAN is a net importer of commercial services, with a trade deficit of over $23 billion in 2007.
"ASEAN total imports of commercial services at $176 billion reflect enormous opportunities for expanding India's exports to the South East Asian region. An early conclusion of FTA in services is significant in view of the expected full services liberalisation in ASEAN by 2015," Singhania said.
He further said that to realise the full potential, India has to push for WTO plus commitments from ASEAN in number of sectors, including accounting and auditing.
Trade between India and the ASEAN economies was about $39 billion in 2007-08.
