India, ASEAN to talk on opening services trade soon

India, ASEAN to talk on opening services trade soon

However, it would take at least two years for talks to conclude

“Negotiations for the free trade pact (between India and ASEAN) on services sector will begin soon,” Thailand Ambassador Krit Kraichitti told PTI. He, however, said given the complex nature of issues involved among India and 10 countries of Southeast Asia, it would take about two years for the negotiations to conclude.

Services sector is of key interest to Indian economy as it contributes over 55 per cent to the GDP. It is also emerging as an important area for export earnings for the country.
But the sector faces hurdles such as harsh domestic regulations, including those relating to visa, and the complex tax regime.

Noting that the services sector is ‘very important’ to multiply trade and investment between ASEAN countries and India, he said ‘safeguard measures’ will have to be incorporated before finalising the pact.

Key sector

“Services sector is very important. The pact will benefit all,” he said, but added that there would be safeguards built into the agreement, which will have to be ‘finalised carefully’.
Seeking greater trade ties with India, Kraichitti said the Indo-ASEAN FTA, to come into operation from January 1 next year, would not only enhance the regional trade but also bilateral trade between India and Thailand.

He hoped that India’s ‘look East policy’ combined with Thailand’s ‘look West policy’ would give a quantum jump to annual bilateral trade which now stands at around US$6 billion.
India last month signed an agreement with the ASEAN for duty-free import and export of 4,000 products, ranging from steel to apparel to sugar and tobacco, over a period of eight years. The pact on trade in goods under the Comprehensive Economic Cooperation Agreement was signed after six years of negotiations.

While the agreement opens the 1.7-billion consumer market to each other, it also eliminates duties on 80 per cent of goods traded between the two regions by 2016.