The ASEAN member nations Indonesia, Philippines and Cambodia are likely to ratify the long-pending FTA on services and investment with India by next month that will pave way for its full implementation by the 10-nation bloc, considered one of the world’s fastest growing regions. The announcement comes from Kaula Lumpur ,where the 13th ASEAN-India Summit was addressed by Prime Minister Narendra Modi over the weekend.
“We are confident that Indonesia, Philippines and Cambodia will ratify the pact by December. Laos is yet to implement the investment part of the pact and we are hopeful it will be done soon,” said a senior External Affairs Ministry official handling issues relating to on Sunday.
Many Association of Southeast Asian Nations (ASEAN) member countries including Singapore have been impressing upon the three nations to ratify the agreement at the earliest and India has been conveyed that the process will be completed by December, government sources said.
The free trade agreement (FTA) in services and investments came into force from July in countries which have ratified it.
Besides the three countries, other members of ASEAN are Brunei, Laos, Malaysia, Myanmar, Singapore, Thailand and Vietnam. Laos has ratified the services part of the pact but it is yet to clear the investment component.
ASEAN is India’s fourth largest trading partner and India in turn is sixth largest trading partner for the bloc. The combined GDP of both sides is USD 2.57 trillion. Both India and ASEAN have been seeking greater economic engagement and set a target of USD 100 billion in trade by 2015.
Full implementation of the FTA on Services and Investment is likely to scale up economic engagement between the two sides significantly.
India had signed a FTA in goods with the ASEAN in 2009. New Delhi was keen on the services deal as it did not gain much from the pact on goods due to already lower tariffs in the region.
India is also part of the Regional Comprehensive Economic Partnership (RCEP), which is negotiating a mega free trade association. The 16-member RCEP comprises 10 ASEAN members and its six FTA partners namely India, China, Japan, Korea, Australia and New Zealand. The 16 economies account for over a quarter of the world economy.
The mega pact, expected to be finalised by 2016, will open door for Indian business in the RCEP countries having combined GDP of USD 17 trillion.
(With Inputs from PTI)