The Big Picture: India-ASEAN FTA

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India and the 10-member ASEAN have agreed to initiate a review of the bilateral free trade agreement (FTA) in goods to make it “more user-friendly, simple and trade facilitative”. India is not happy about the fact that its trade deficit with ASEAN has widened significantly since the pact was implemented in January 2010. A NITI Aayog study reveals that India’s trade deficit with ASEAN doubled to $10 billion in 2017 from $5 billion in 2011. A review of the India-ASEAN FTA could help improve utilisation in India by making the pact simpler and more user-friendly. In the joint statement, the Ministers welcomed the recommendations of the ASEAN-India Business Council to further promote the potential of bilateral trade through the utilisation of the ASEAN-India FTA as well as cooperation in some areas of mutual interest, such as financial technology, connectivity, start-ups and innovation, empowerment of youth, and women and MSME development. On this edition of the big picture we will analyse the trade and economy relationship between India and ASEAN. Joining me on the program today are:

Guests - Shiv Shankar Mukherjee, Former Ambassador,
Rajendra Harshe, Visiting Professor, Department of International Relations, South Asian University,
Geethanjali Nataraj, Professor of Applied Economics, Indian Institute of Public Administration,

Anchor - Frank Rausan Pereira

Producer - Sagheer Ahmad

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India, ASEAN FTA
Introduction
* India and ASEAN -review of the bilateral free trade agreement (FTA) in goods to make it "more user-friendly, simple and trade facilitative"
* India is not happy about the fact that its trade deficit with ASEAN has widened significantly since the pact was implemented in January 2010
* A NITI Aayog study-India's trade deficit with ASEAN doubled to $10 billion in 2017 from $5 billion in 2011
* A review of the India-ASEAN FTA -simpler and more user-friendly.
* recommendations-ASEAN-India Business Council-ASEAN-India FTA

Present scenario
* Look east to Act East
* 10 countries, $ 1.8 billion mkt
* Economic decline in India
* Excluded-10% of goods & services
* Tariff & non tariff barriers-services sector
* FTA agreement- no review or edit clause
* Bimstec- India bridging SAARC & asean

Areas to address
* SE Asian countries-export led growth
* Trade deficit-widening, regulatory measures, stringent non tariff barriers, rules of origin requirement, imports from asean increased disproportionately with exports from India
* Connectivity & Infrastructure- Myanmar to Bangkok, rails, telecommunication, msme cooperation, completing projects
* Countering China
* Maritime security

Mutual areas of Interest
* Telecommunications
* Services sector
* financial technology
* connectivity
* start-ups and innovation
* empowerment of youth
* women
* MSME development

Way Forward
* Pro India Trade
* Capacity building for Indian Exporters- awareness of regulatory mechanism in asean countries
* Simplifying agreement-user friendly
* Strengthening Bimstec
* Analysing RCEP
* Education
* Cultural ties- Sanskrit, Rama

Conclusion
Trade is one of the underpinning of
any of our major relationships around the world. It is fundamental to india’s Act East Policy. It is needed to strike a balance & come up at a fair solution where we find access to their markets in a fair fashion while giving access in a fair fashion to their goods & services. Also awareness among Indian exporters regarding the regulatory mechanism in asean nations will work in favour of the nation

aditikaushik

15 countries signed the rcep for free trade and south america wants to join

corrinetsang

India-ASEAN FTA

1. The economic decline in India in various sectors is an important subject.
2. ASEAN has made better use of FTA.
3. India is a bridge between SAARC and ASEAN countries.
4. Asia engine of growth.

Significance:
1. Trade with ASEAN is fundamental to India's overall Look East and Act East policy.
2. $ 1.8 billion worth market
3. Telecommunication is an advantage.

Issues:
1. India's side of the FTA negative list is very short, about 10% of whole goods and services. Whereas some of the ASEAN countries have a much bigger list of negatives that are excluded.
2. No review or exit clause
3. All Southeast Asian countries are following export lead growth and India's market is huge for them.
4. Trade deficit- India has a trade deficit with China too with which India is negotiating RCEP of which all the ASEAN countries are a member. Reason- not able to get access to the market for the exporters due to regulatory mechanisms, nontariff barriers, rules of origin.
5. Competitive prices not able to match.
6. Terror groups- Bodoland, ULFA- be kept in mind.

Scope of trade between India and ASEAN:
1. All-time high. Crossed $80 billion marks. Shown a massive rise in the past 15 years.
2. imports from ASEAN have increased at the rate of 14% whereas that from India only 9-10%.
3. Deficit- $21-22 billion.
4. Services agreement too.
5. India is demanding market access for its service professionals which it has not got.
6. RCEP under negotiation. RCEP will superimpose itself on the FTA between India and ASEAN.

The trade war between US and China:
Though has affected the world India has not been able to capitalize on it.
Not able to increase trade with China.
In RCEP we have to give steeper concessions.

Way forward:
1. Strike a balance. Recalibrate its approach.
2. Access to markets in a fair fashion for all.
3. Get better connectivity and infrastructure. eg: Build roads from the northeast which connect to Myanmar and Bangkok.
4. Infrastructure and telecommunication both should be promoted and developed.
5. Trade should be pro India. Intraregional trade relations. Negotiate sector by sector.
6. Capacity building for exporters and make them aware of rules in other countries.
7. Make regulatory mechanisms- transparent and easier.
8. India needs to have maritime security when trading with southeast Asian countries.
9. Sustained exports. Exchange of personnel and services. Work in the areas of -Education, Tourism. Cultural aspects- interlink with the area- Sanskrit language. Startups.
10. India should compete to become efficient exporters by reviewing the land acquisition-related, labor-related, investment, promotion of economic growth, promoting the growth of all industrial sector policies.

scorhigh

Prof Harshe just many dimensions he covered everytime he spoke.

lifeissuesinGermany

Only blaming ASEAN is of no use. Our most of domestic industries are worst on every international standard be it content or packagings. We really need to improve on it and stop spoon feeding them. Them must be competitive in their quality and pricing to face the global competition.

anujkr

besides ASEAN, also with China we India have a huge trade deficit of some $63 billions a year, ... as a consequence we are lacking in our manufacturing both small and large businesses and loss of jobs as well as self employment avenues, ween Trump/America has rightly stood up to tell China to refix trade deficit faced by America .... in India due to massive import of cheaper chinese goods there is set back with closing of Indian manufacturing units ....

amargrewal

It is a real debet and represent the best journalism of our country

altafrja

Shiv Shankar Sir Thanks Aa U Are
RS
Also Frank Thanks

jayshelke

Food for good thoughts:

• I have no race prejudices, and I think I have no colour prejudices or caste prejudices nor creed prejudices. Indeed I know it. I can stand any society. All that I care to know is that a man is a human being-that is enough for me; he can’t be any worse. Mark Twain

• We think too much and feel too little. More than machinery, we need humanity; more than cleverness, we need kindness and gentleness. Without these qualities, life will be violent and all will be lost. Charlie Chaplin

• We have flown the air like birds and swum the sea like fishes, but have yet to learn the simple act of walking the earth like brothers. Martin Luther King Jr

• I’m not concerned with your liking or disliking me… All I ask is that you respect me as a human being. Jackie Robinson

• Never discourage anyone who continually makes progress, no matter how slow. Plato

• Find the sweetness in your own heart, then you may find the sweetness in every heart. Rumi

• Do your little bit of good where you are; it’s those little bits of good put together that overwhelm the world. Desmond Tutu

• I am constantly preoccupied with how to remove distance so that we can all come closer together, so that we can all begin to sense we are the same, we are one. David Hockney

• In harmony civilised humans build houses but due to hate uncivilised humans destroy these houses. Shame on them

yogeshraja

only international topics for past 1 week !

ankitdhakad

Crux
India and 10 members ASEAN has agreed to initiate the review of bilateral FTA to reduce the complexities and make it more trade facilitative. India's trade deficit with ASEAN has grown significantly to $10 billion in 2017 from $5 billion in 2011.
The trade deficit not only with ASEAN countries but with China and other countries is a bone of contention.
ASEAN is a major trading partner of India and it holds deep cultural and political understanding as well. Deepening of economic ties require extensive work on building cross border Infrastructure linking North-East India to ASEAN countries via road and railways.

Aman-lpff