Dec Asean-India trade set to exceed $122b in 3 years

PHOTO: Dec Asean-India trade set to exceed $122b in 3 years
Above photo is Singapore Prime Minister Lee Hsien Loong.

Imagine the traders making twice as much money or the ships carrying two times the cargo on this route.

Trade between Southeast Asia and India is set to soar in the coming decade as a long-delayed free trade pact on services and investments was finally confirmed on thursday.

From about US$80 billion today, the immediate target is for two-way trade to exceed the US$100 billion (S$122 billion)  mark in three years' time.

Indian Prime Minister Manmohan Singh, however, laid down an even bigger challenge to Asean: Aim for the "milestone" of US$200 billion by 2022.

In a speech at the start of the Asean-India commemorative summit, he said that the key to a "closer partnership" between the two sides would be its connectivity, be it physical, institutional, people-to-people ties, by sea and air, and even in the digital world.

This was a common theme in many of the 10 Asean leaders' speeches on wednesday at the two-day summit in the Indian capital, organised to mark 20 years of formal engagement between Asean and India.

Singapore Prime Minister Lee Hsien Loong called for the 10-member Asean bloc and India to strengthen cooperation in their various connectivity projects.

He shared how the landmark Asean-India car rally, which will have its ceremonial flagdown here today after 22 days criss-crossing the region, symbolised the importance of connectivity.

Mr Lee called for road connectivity projects such as the ongoing India-Myanmar- Thailand trilateral highway and the extension to Laos and Cambodia to be completed.

He also reiterated a point he made at last month's Asean Summit in Cambodia - that South-east Asia and India should kickstart talks on an Asean-India air transport agreement when possible. 

"This would bring our businesses and tourists closer together, as our maritime links did centuries ago. It would also help fulfil the Asean-India MOU (memorandum of understanding) on strengthening tourism cooperation which we signed in January (this year)," he told his counterparts."

"Hence, we should give our negotiators the full mandate to conclude a mutually beneficial agreement," he added.

As far as trade was concerned, however, Mr Lee noted that the Asean-India FTA was now a comprehensive agreement, with the latest services and investment chapters adding on to the goods deal that was inked in 2010.

While the implementation of the latest FTA is expected to take up to a year from now, Malaysian Prime Minister Najib Razak was quoted as telling Bernama on thursday that the plan is to sign the pact next August.

With this crucial piece of the jigsaw in place, Mr Lee said that Asean was now able to welcome India's full participation in the ongoing Regional Comprehensive Economic Partnership (RCEP) negotiations.

The RCEP, if successful, would be the largest free trade bloc in the world, comprising the 10 Asean member states along with China, India, Japan, South Korea, Australia and New Zealand.

The grouping includes more than three billion people, has a combined GDP of about US$17 trillion, and accounts for about 40 per cent of world trade.

"RCEP is not just an FTA, but a strategic partnership between Asean and its key partners. RCEP will enable India to take its rightful place in regional integration efforts," said Mr Lee.

Following the leaders' two-hour plenary session, a new vision statement was released to chart the future direction of Asean-India relations.

The document aims to ramp up ties across diverse areas such as trade, infrastructure, energy, culture and security.

India became a sectoral dialogue partner of Asean in 1992 and was elevated to full dialogue partner three years later in recognition of the country's rising stature and economic potential.

Since 2002, the two sides have been holding annual summits.