Thursday, August 28, 2014

The 10 members ASEAN and India share an ancient and deep economic, cultural and societal ties which in contemporary times has received a greater thrust by India’s ‘Look East’ policy and the reciprocation of the same from the ASEAN member countries.

The economic ministers of the member states of ASEAN and Indian representatives assembled in Myanmar are expected to sign a services and investment trade pact. By signing this India takes an apprehensive step not only of “look east”, but also “act east”.

is going to be signed ?

What now is going to be signed is the  free trade agreement(FTA) on services and investment (we already have signed one on TRADE )


The FTA if signed will be one of the largest FTAs in which the population of  1.8 billion with the combined GDP of $2.8 trillion.


1. India being a net-exporter of services and the ASEAN countries net-importer of services, there is no doubt that both the sides are to be immensely benefited.
2. India’s strength in services will counter balance the strength of some ASEAN nations in primary goods and manufacturing.
3. This agreement will help India gain a greater market access for its professionals in some developed ASEAN member countries.
4. This agreement not only bring monetary benefits but also, benefit the customers by increasing competetion and introduction of more products and shelved prices.
5. This strengthens India’s vision of the world regarding look east policy and also places India in the evolving global economy.
6. By signing this agreement India can overcome the primary hurdles to the services free trade agreement which was subjected to apprehensive attitude of Philippines and Indonesia to India’s growing power in services segment.
7. It will also help in countering CHINESE DOMINANCE in the region .

How  can it benefit North - East ? 

Will help in North east region development and connectivity ,Manipur development as medical tourist spot,effective counter terrorism operations etc.


Various stakeholders deriving benefit out of India’s services and investment pacts can be divided into two group: Domestic beneficiaries and ASEAN beneficiaries.


(a) Government: Relaxation and syncronisation of investment regime will attract huge FDI from ASEAN who are preferred by Western MNCs to route their FDI to India.
(b) Service sector: Service sector, a growth driver of Indian economy since liberalisation will get new markets to foray.
(c) Factor and Non-Factor services: Especially labour and capital will have better options to explore.
(d) Infrastructure: New government’s dream of smart cities is linked with collaboration from SE Asian countries like Singapore.
(e) Education sector: Increased demand for service related skills will boost, diversify and raise the level of education sector to global standards.


(a) Labour supply: ASEAN can access the technically skilled and globally cherished pool of Indian Engineers, Doctors and Research personnel.
(b) Economy: The productive capacity of ASEAN, that has stagnated offlate, will be rekindled with access to Indian market.
(c) Collaborative enterprise: In globally contested negotiation platforms ASEAN will get support of India’s diplomatic might.
(d) Regional strength: Emergence of regional bloc will leverage both ASEAN and India’s stand in globalisation process.


Apart from multifarious benefits there are certain apprehension among ASEAN nations especially considering the advancement of Indian service sector. The competetion India offers in global market in areas like software, KPO, BPO etc. especially to Philippines and Thailand need to addressed if a sutainable and mutually prosperous FTA is to evolve.


1.) Despite strong pressure from the US, India managed to remove any mention of the recent fiasco over the WTO’s trade facilitation agreement (TFA) in the final document of East Asia Summit economic ministers meeting.


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