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Please read the clarification at the end.
On Monday, the Government of India signed the long-pending pact on services’ trade and investment with the Association of Southeast Asian Nations (Asean). This will mean more market access to the 10 countries in the bloc for our many professionals.
India and Asean already have a free trade agreement (FTA) on goods; it took effect in 2010. Once the FTA in services and investment gets ratified, the entire set of pacts will become a Comprehensive Economic Partnership Agreement.
Nine of the 10 Asean countries have signed the deal but not the Philippines, due to domestic reasons. To become operational, all 10 must sign it and all the respective legislatures must ratify it. So, for that matter, must India’s Parliament.
Asean’s members are Singapore, Malaysia, Thailand, Myanmar, Vietnam, Indonesia, the Philippines, Brunei, Cambodia and Laos.
“India signed the deal because it had to. I could not be present at Myanmar during its signing because of a genuine concern. Every member had signed it then, except the Philippines. However, the agreement was sent to us last week and we signed it today (Monday). It will have to be ratified by Parliament,” Commerce and Industry Minister Nirmala Sitharaman told Business Standard.
“The pact will provide a commercially meaningful market across Asean for our professionals, including those from the information technology and IT-enabled services sectors. The Philippines is completing its domestic procedure and might sign soon,” said an official in the department of commerce.
The official said each Asean member had tabled an individual schedule of commitments on operationalising the deal. India has tabled three such schedules — one for the Philippines, one for Indonesia and one for the remaining eight states.
Signing of the agreement was supposed to happen in Myanmar’s capital of Nay Pyi Taw last month, during the Asean-India economic ministers meeting. However, Sitharaman suddenly cancelled her going, choosing to stay here for the function to launch the Pradhan Mantri Jan Dhan Yojana.
A senior commerce department official told Business Standard, that although India had signed the deal, a final call will be taken during the India-Asean summit scheduled for November in Myanmar, to be attended by Prime Minister Narendra Modi and other heads of government. It was presumed that when to operationalise things and related details would be decided then or earlier, a senior official told Business Standard. The deal was negotiated and agreed upon in December 2012, under the previous United Progressive Alliance government.
Some of the important articles are on transparency, domestic regulations, recognition, market access, national treatment, joint committees on services, review, dispute settlement and denial of benefits.
The agreement on goods has not been ratified by all Asean members. The government had come under attack recently over the deal for the lack of increase in our exports to the region, while imports from many Asean member-states such as Singapore, Malaysia, Thailand and Indonesia have been rising.
Under the goods FTA, Asean countries and India had decided to lift import tariffs on a little more than 80 per cent of traded products by 2016. The FTA collectively covers a market of nearly 1.8 billion people and proposes to gradually slash tariffs for over 4,000 product lines.
| Correction |
| It was reported that the agreement reached India last week and it was signed on Monday, September 8. The agreement was signed last week on Thursday, September 4 and not on Monday, September 8. The error is regretted. |
