India signs FTA in services, investments with ASEAN

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SME Times News Bureau | 10 Sep, 2014
India has formally signed the free trade agreement (FTA) in Services & Investments with the Association of South East Asian Nations (ASEAN), paving the way for freer movement of professionals and further opening opportunities for investments, informed ministry of commerce and industry in a press release on Tuesday.

The Services Agreement will open up opportunities of movement of both manpower and investments from either side between India and ASEAN. The country implemented FTA in goods with 10-member ASEAN in 2011.

According to an official release, "Nine out of ten ASEAN countries have signed the same. Philippines is completing its domestic procedure and it is expected to sign soon."

The agreement was signed on Monday. It could not be signed at the India-ASEAN Economic Ministers meeting in Myanmar last month as Commerce Minister Nirmala Sitharaman could not attend owing to other engagements.

The FTA in services and investment, when implemented, is expected to facilitate the temporary movement of business people, including contractual service suppliers and independent professionals in accounting, architecture, engineering services, medical and dental, nursing and pharmacy, computer services and management consulting.

It may be mentioned that India-ASEAN Agreement on Trade in Goods was signed in 2009 and became effective from 2010. The Trade Agreement has boosted the total trade between India and ASEAN substantially in the past four years.

It may be noted that this Agreement on Services & Investment was scheduled to be signed in Nay Pay Taw, Myanmar, during the ASEAN Economic Ministers (AEM) meeting on 26th August, 2014.

However, in view of the launch of Prime Minister's Jandhan Yogana for inclusive banking, the Minister of State (Independent Charge) Commerce and Industry Nirmala Sitharaman (who was in-charge of the launch of the scheme) could not attend the AEM.

She, however, deputed the senior officers from the Ministry of Commerce who attended all the important meetings and consultations on her behalf.

The Minister reiterated the deep historical, cultural and economic ties with ASEAN-India values its economic partnership with ASEAN.

The signing of the agreement in Services & Investment is reflective of India's deep commitment to have a strong institutional architecture for economic ties with ASEAN.

As part of this economic vision, India is also part of the RCEP negotiations which presently being discussed between ASEAN and its six partner countries, it added.

"It will supplement the India-ASEAN FTA in goods and help in getting greater market access for India's professionals and service providers in the 10-member block. We are happy that an annexure on movement of natural persons has been included in the agreement, which will benefit our professionals," Sidharth Birla, president, Federation of Indian Chambers of Commerce and Industry said.

"Asean's share of global services trade has been rising over the past decade or so, moving up from 4.6 percent in 2000 to around 8 percent in 2012. Asean import of services stood at over $306 billion in 2012 and from this perspective it offers substantial market opportunities for India in several sectors including health-care, accountancy, telecom and business services besides IT and ITeS (IT-enabled services)," Birla added.