The Hindu : Tamil Nadu News : `India-ASEAN trade potential remains underutilised'

Online edition of India's National Newspaper
Saturday, Mar 18, 2006

Tamil Nadu

Tamil Nadu

`India-ASEAN trade potential remains underutilised'

Special Correspondent

Both are trading with the rest of the world but not enough with each other Timely action will boost economic relations, says official

MEET: (From left to right) S.R. Dhruvan and C. Sarat Chandran, president and director of the India-ASEAN-Sri Lanka Chamber of Commerce and Industry, with R.S. Ratna, Director of Commerce, Government of India, P. Gopalakrishna, secretary, IASLCCI, and U Kyi Thein, Myanmarese Ambassador, at a seminar in Chennai on Friday. — Photo: V.Ganesan .

CHENNAI: The actual potential for trade between India and the Association of South-East Asian Nations (ASEAN) remained underutilised as both "were trading with the rest of the world but not enough with each other" despite their mutual strategic positioning, R.S. Ratna, Director, Regional and Multilateral Trade Relations Division, Department of Commerce, Government of India, said here on Friday.

A tremendous potential existed, especially in exports from India to ASEAN, and timely action from both sides would boost economic and trade relations, he said during the inauguration of a seminar on Indo-ASEAN Business Opportunities organised by the India-ASEAN-Sri Lanka Chamber of Commerce and Industry here on Friday.

Free Trade Agreement

The key elements of the India-ASEAN Framework Agreement, signed in 2003, covered Free Trade Agreement in goods, services, investment and areas of economic co-operation. The deadline for the conclusion of negotiations had been extended to June and the one for reduction/elimination of tariff reductions till January next.

Under the tariff liberalisation regime, India would eliminate tariffs for Brunei Darussalam, Cambodia, Lao PDR, Indonesia, Malaysia, Myanmar, Singapore, Thailand and Vietnam by 2011 and Brunei Darussalam, Indonesia, Malaysia, Singapore and Thailand would reduce their duties to India by the same year. The newest ASEAN members — Cambodia, Laos PDR, Myanmar and Vietnam — would eliminate tariffs to India by 2016. India and Philippines would mutually eliminate tariffs by 2016.

In 2004-2005, imports from ASEAN to India grew by 19.24 percent, while Indian exports to ASEAN were up by 39.21 percent.

The FTA could be used for enhancing material management, cheaper imports, better quality products and market access, investment flows and joint ventures, mergers and acquisitions and consumer welfare. For India, the benefits lay in technology transfers, expansion of market in services, trade facilitation, harmonisation of customs procedures and removal of non-tariff barriers, Mr. Ratna said.

A long way to go

U Kyi Thein, Myanmarese Ambassador and chairman of ASEAN's New Delhi Committee, said that although the FTA was not too far away to see, it had a long way to go in utilising synergies, harmonising standards and removing language and non-tariff barriers.

India-ASEAN trade in 2004-05 stood at $16.97 billion, seven times more than the 1993-94 figures.

S.R. Dhruvan, president, IASLCCI, said the move towards free global trade, emergence of new and frontier technologies and aggressive repositioning of India and ASEAN at the cutting edge of the knowledge revolution were building blocks of a future relationship.

Rozaimee bin Dato Abdullah, First Secretary to the High Commission of Brunei Darussalam; Rosli bin Ismail, Consul-General of Malaysia; Ton Sinh Thanh, Deputy Head of Mission of the embassy of the Vietnamese Socialist Republic, C. Sarat Chandran, director of IASLCCI, and representatives from Indonesia, Thailand and Philippines participated.

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