Perhaps enacting their age old cultural bonds into a fresh endeavour of mutual cooperation both India and the Association of South East Nations (ASEAN) are today riding on the crest of high hopes of signing an historic free trade agreement (FTA) on services and investment during the scheduled two-day ASEAN summit on Dec.20 and 21, which, India for the first time will host in its capital, New Delhi.
During this meeting, several ASEAN leaders - as many as nine Presidents and Prime Ministers from ten South East Asian Nations - are putting forth a special effort to be present in this India-specific event. Earlier, all India-ASEAN summits were held on the sidelines of the summit proper, that is, always in an ASEAN country. Along with signing the FTA with ASEAN, India is also negotiating with the members of the block for a market opening pact. Continuing with the policy to boost its ties with the member-countries of this region, India has already implemented FTA with Singapore and Malaysia and is negotiating with Indonesia and Thailand, as well.
If the formal flagging down of a car rally on Friday that traversed most ASEAN states signifies the theme of connectivity that is on top of the India-ASEAN agenda, the other linkages with the South East Asian countries in terms of culture that way of life and civilizational values are already on display. It is in this context that the summit assumes considerable significance because of India’s impending integration into the ASEAN matrix through a land route by 2015. Leaders are already looking beyond this India-Mymanyar-Thailand trilateral highway with plans to extend it to Cambodia, Laos and Vietnam. India is also building an alternate route into the Northeast via another ASEAN member, Myanmar, and this maritime-cum-road route is expected to be operational by 2017.
At present, trade between India and ASEAN has reached the $80 billion mark, which both sides wish to raise to beyond $100 billion by the end of 2015. After operationalizing an FTA agreement in goods in August last year, both sides were engaged in widening the base of the pact by including services and investments. However, talks were delayed due to differences among members of the block. “The three pillars of India-ASEAN economic relations are FTA in goods (which was finalised in 2009 and came into effect in 2010), services and investments. The delay in reaching a consensus on FTA in services and investment can be attributed to the fact that there are ten nations having different issues and challenges, hence the complexities,” as the Cambodian Minister of Commerce, Cham Prasidh, said.
Earlier, inaugurating the second India-ASEAN business fair, organised by the Federation of Indian Chamber of Commerce and Industry, the Indian Commerce and Industry Minister, Anand Sharma, said that the negotiations for regional comprehensive economic partnership- a mega trade agreement, comprising 16 countries of the region, including India and China- were expected to conclude by 2015.
The highlight of the tomorrow’s summit is expected to be a formal declaration of the conclusion of negotiations for a free trade agreement (FTA) in services and investments, as promised by the Indian P. M. Manmohan Sigh on the sidelines of the last month’s ASEAN summit in Phnom Penh. Further, a vision document based on a patchy eminent persons group report, will also be released.
Fortunately, all participating countries are strongly supporting the process of negotiations so that they could have an ambitious and balanced comprehensive agreement that would be in place once the services and investment chapter was concluded. On the economic front, a comprehensive FTA won’t be the end of the on-going exercise. India will immediately join negotiating for a pact - Regional Comprehensive Economic Partnership (RCEP) - covering 16 countries (the 10 ASEAN members in addition to its six Asian dialogue partners) which may take three years to finalise.
Against this backdrop, as India has already reoriented its Look East Policy for ensuring better ever relations with all the members of the region, particularly, in terms of strategic partnership in the trade and security areas, the emerging economic cooperation between India and ASEAN nations will be a great achievement for both the partners and will demonstrate enough potential for an ever increasing multifarious partnership, leading to all round growth and prosperity.
Furthermore, the cooperation between them will add to their collective power with which they can effectively stand against the rising menace of terrorism and other socio-economic and political challenges. Also, their unity and strength will deter outside powers from intervening into their internal affairs and will work as a powerful regional bulwark against undue sovereign claims by China over South China Sea and also over territories of most of the ASEAN nations, particularly, Vietnam and Philippines and the same holds regarding the East China Sea.