Asean leaders and India finalise deal in services and investments sectors

PHOTO: Asean leaders and India finalise deal in services and investments sectors

NEW DELHI - The Asean-India Commemorative Summit came to a close with the leaders adopting a vision statement to chart the future direction of Asean-India relations.

The future may have arrived early with the conclusion of negotiations of the Asean-India Free Trade Agreement (FTA) in the services and investments sectors.

A month ago at the Asean Summit in Cambodia, negotiations were nowhere near being finalised.

"We were way off. The finishing line was not in sight," said a Malaysian trade official.

International Trade and Industry Minister Datuk Seri Mustapa Mohamed had been frustrated at the progress, or the lack of it, and had said negotiations reached a deadlock.

Malaysia is the country coordinating the FTA and had successfully negotiated the FTA for the goods sector back in 2010.

It was a surprise, almost bordering on a miracle, when Asean leaders and Indian Prime Minister Dr Manmohan Singh announced that the FTA in the services and investments sectors had been finalised during the Asean-India Commemorative Summit on Thursday.

Mustapa hinted the day before that a round of negotiations in Jakarta between Dec 12 and 14 had been fruitful.

"Both sides have compromised and shown flexibility. We are almost there," he said.

He credited the ministry's Asean economic cooperation division senior director P. Ravindran, who was lead negotiator, for the progress.

Government sources said talks hit an impasse at 11.30pm on the final day of negotiations but both sides doubled their efforts and ironed out most of the contentious points by 1.30am.

Prime Minister Datuk Seri Najib Tun Razak, who led the Malaysian delegation in New Delhi, was happy with the achievement and told Malaysian firms to capitalise on the liberalisation of the various sub-sectors.

The FTA, expected to be inked in August next year, will liberalise sub-sectors such as healthcare, tourism, transportation services, communications, construction, business services, education, environmental services, tourism and travel-related services, pharmaceutical and bio-technology.

"Asean and India need to push toward greater economic activity. The opportunities are tremendous. We must do more to promote trade in goods and services, as well as investments.

"There is simply no better example of expressing confidence in another country than by making major investments in that particular nation," he said.

Dr Manmohan called it a valuable milestone in Asean-India relations, saying it would boost economic ties the way the FTA in goods had.

"I am optimistic that our trade will exceed US$100bil by 2015 and we should aim for the milestone of US$200bil in 10 years."

It was a fitting way to commemorate 20 years of Asean-India relations, starting out as dialogue partners and now strategic partners.