Almost two years after clinching an agreement on trade in goods, India and members of the Association of South East Asian Nations (Asean) are set to sign the remaining deal on services and investments, stuck due to concerns raised by certain countries on the issue of movement of professionals and an easier visa regime for them.
The agreement was expected to be concluded last year.
“Differences had been sorted but it will take some more time to conclude the final modalities. But it will be concluded by this year,” a senior official from the Ministry of Commerce and Industry told Business Standard.
Under the services sector, India had been demanding greater opening in the Mode-IV category, so that more and professionals like doctors, nurses, chefs, accountants get greater job opportunities in Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, which make the 10-member bloc.
The services sector accounts for 55 per cent of India’s gross domestic product (GDP).
Vietnam, Thailand and the Philippines were especially concerned with India’s expertise in various sectors such as telecom, information technology, hospitality and healthcare, among others, with a qualified English-speaking human resources pool. India is the 10th largest services exporter in the world, while Asean is a net importer.
Last week, Commerce and Industry Minister Anand Sharma had said the deal would be signed by the end of 2011, echoed by Malaysia’s Trade Minister Mustapa Mohamed, Indonesian Trade Minister Mari Elka Pangestu and Philippine Trade Minister Gregory Domingo during the India-Asean business fair here.
India and the Asean countries had earlier decided to have a broad-based comprehensive economic partnership agreement encompassing trade in goods, services and investments. The goods deal was signed in 2009 and implemented in 2010. The Philippines and Cambodia are yet to implement this deal.
The goods agreement would do away with at least 80 per cent of import tariffs in a phased manner between 2013 and 2016. The tariffs on sensitive products would also be slashed by five per cent by 2016.
Last year, during the India-Asean summit in Hanoi, Prime Minister Manmohan Singh announced a visa-on-arrival facility for citizens of Cambodia, Vietnam, the Philippines and Laos. He also emphasised the need to expediting the finalisation of a free trade agreement in services and investments between India and the South East Asian nations.
India and Asean have also set the objective of increasing bilateral trade to $70 billion by 2012 from $50.33 billion last year. India had been aggressively hunting for newer pastures to sell its produce, with growth and demand both plummeting sharply in the traditional destinations of the US and Europe.
