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Economy India signs agreement with ASEAN amid concerns of lack...

India signs agreement with ASEAN amid concerns of lack of reciprocity

Nay Pay Taw, Myanmar — As announced in सिर्फ़ News on 3 September, India has formally signed the Trade in Services & Trade in Investments Agreement with ASEAN. The Services Agreement will open up opportunities of movement of both manpower and investments from either side between India and ASEAN; 9 out of 10 ASEAN countries have signed it already. The Philippines is completing its domestic procedure and it is expected to sign the agreement soon.

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.

The services agreement includes commitments on market access, domestic regulations and mutual recognition of qualifications of professionals, but individual Asean countries have offered different levels of market opening to India. The bloc includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
Sources in the government say, while countries like Malaysia and Singapore, with which India has separate FTAs, are more comfortable with higher levels of liberalisation, others like Vietnam and Philippines are more closed and fear competition from the English-speaking Indian workforce. Hence, the ten countries have given offers based on their levels of comfort. 

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 Jan Dhan Yogana for inclusive banking, 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.

Key features of the Trade in Services Agreement

  • The Trade in Services Agreement with the ASEAN contains all features of a modern and comprehensive agreement on services and is in line with the other bilateral agreements that India has signed so far. Some of the important articles contained in the agreement are ones on transparency, domestic regulations, recognition, market access and national treatment, increasing participation of developing countries, joint committee on services, review, dispute settlement and denial of benefits.
  • Both India and ASEAN member states have taken GATS plus commitments in various services and modes of supply. Each ASEAN member state has tabled individual schedule of commitments which are equally applicable for India and other ASEAN member states. India on the other hand has tabled 3 schedules of commitments one for Philippines, 1 for Indonesia and 1 for the remaining eight ASEAN member states. It was also agreed by India that in order to increase participation of the least developed countries no additional requests would be tabled to the CLMV countries (Cambodia, Lao, Myanmar and Vietnam). All the 3 schedules tabled by India are well within the existing autonomous regime of India.
  • A brief annex on movement of natural persons (one of the key areas of interest for India) has been included in the agreement. This annex defines business visitors, intra corporate transferees (managers, executives and specialists) and contractual service suppliers. This will help provide commercially meaningful market across in ASEAN for our professionals, including those from the IT/ITeS sector. Independent professionals have not been defined in the annex.

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