India, ASEAN finalize FTA pact in services, investments
India and the Association of Southeast Asian Nations (ASEAN) finalized the Free Trade Agreement (FTA) in services and investments.
What does this mean?
This pact is expected to enahance trade b/w India and ASEAN to $100 billion by 2015 which currently stands at $80 billion. India had been requesting ASEAN to open up its service sector further, including steps to cover independent professional services and contractual service suppliers at all levels. During negotiations, India agreed to drop its request for independent professional services and as a trade-off, ASEAN dropped its demand for prudential measures in financial services. The final legal pact on services and investment is likely to be given a further shape by February, 2013, and the signing could take place in August 2013. India has already signed FTA in goods sector with the group.
India is also negotiating similar market opening pacts with members of the ASEAN grouping. India has already enforced FTA with Singapore and Malaysia and is negotiating with Indonesia and Thailand in this regard. The FTA would also open the doors for discussions on a Regional Comprehensive Economic Partnership (RCEP) that ASEAN plans to sign with its 6 main trade allies, which include India.
ASEAN and six partners — Australia, China, India, Japan, South Korea and New Zealand — will start discussions on the RCEP in 2013, which are likely to form the world’s economic bloc in 2015.