Economy

India looks for last-mile gains on services pact with Asean

Amiti Sen New Delhi | Updated on March 12, 2018

Prime Minister Manmohan Singh with otherAsean leaders at the recent ASEAN-India Commemorative Summit held in New Delhi.   -  The Hindu

10-nation group offers little market access on services

Diplomatic compulsions forced New Delhi to accept a lack-lustre services and investment deal with the Asean countries, but the negotiating team is still hopeful of making some last-minute gains while drafting the final agreement.

“The Prime Minister’s Office wanted us to close negotiations during the commemorative summit last month for diplomatic reasons, else we would have tried harder for a more substantive pact. However, we will try to see if we can make some gains while we put the final papers together,” a Government official told Business Line.

Asean members have offered very little in terms of increased market access in services to India, especially when compared to what they have given other partners like Australia and New Zealand. The 10 countries have been very conservative in their offers on allowing more access under Mode 4 to professionals, keeping the IT sector out of the agreement.

Asean has offered longer visa permits and other qualification relaxations to professionals from Australia and New Zealand, which go beyond the commitments made at the World Trade Organisation, but have refused to give similar concessions to India.

“If we had six months more, we could have indeed tried to get a better deal. But we had no option but to close negotiations,” the official said.

Indian negotiators will now try to seal whatever little gains that they have been able to make in select services by putting in place time-lines in the final schedules.

“We will try to fix a date for finalisation of mutual recognition agreements in various categories so that our professional qualifications get easy recognition in the Asean countries,” the official said, adding that they would try to make similar manoeuvres in other areas.

India lost much of its negotiating power in the services deal when it agreed to Asean’s demand of delinking the trades in goods pact and sign it early. The India-Asean goods free trade agreement (FTA) is expected to double bilateral trade to $200 billion by 2022.

The Asean countries have a lurking fear that Indian services export will ruin their industry, but it is completely unfounded, said trade expert Ram Upendra Das working with research organisation RIS.

In fact, the Philippines and Indonesia have forced India to agree to two separate pacts with them with negligible offers for professionals.

“There are a number of sectors like construction and engineering where the Asean countries are very competitive,” Das said.

The other Asean countries include Cambodia, Brunei, Myanmar, Malaysia, Thailand, Singapore, Vietnam and Laos.

Prime Minister Manmohan Singh, right from the beginning of the UPA’s first stint, has been keen on developing closer ties with South East Asia in line with the Look East policy first advocated by Narasimha Rao in the early nineties.

Some trade experts say that in order to gain a foot-hold in the region, India has been giving far too many concessions in its trade deals with these countries.

> amiti.sen@thehindu.co.in

Published on January 13, 2013

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