Emerging Cooperation between India and ASEAN

Amidst high hope, India and the Association of South East Nations (ASEAN) plan to sign a historic free trade agreement (FTA) on services and investment in the scheduled two-day ASEAN summit on Dec. 20 and 21, which for the first time, India will host in its capital, New Delhi.

In this mega meet, several ASEAN leaders -- as many as nine Presidents and Prime Ministers from ten South East Asian Nations -- are putting in a special effort to be present in this India-specific event. Earlier, all India-ASEAN summits were held on the sidelines of the summit proper, that is, always in an ASEAN country.

Apart from the FTA with ASEAN, India is also negotiating with the members of the bloc for a market opening pact.

Continuing its policy of boosting its ties with the member-countries of this region, India has already implemented FTA with Singapore and Malaysia and is negotiating with Indonesia and Thailand, too.

If the formal flagging down on Friday of a car rally that traversed most ASEAN states signifies the theme of connectivity that is at the top of the India-ASEAN agenda, the other linkages with the Southeast Asian countries in terms of culture, way of life, and civilizational values are already on display. It is in this context, the summit assumes considerable significance because of India's impending integration into the ASEAN matrix through a land route by 2015. Leaders are already looking beyond this India-Mymanyar-Thailand trilateral highway with plans to extend it to Cambodia, Laos, and Vietnam. India is also building an alternate route into the Northeast via another ASEAN member, Myanmar, and this maritime-cum-road route is expected to be operational by 2017.

At present, trade between India and ASEAN has touched the $80 billion mark, which both sides wish to carry beyond $100 billion by the end of 2015. After operationalizing an FTA agreement involving goods in August of last year, both sides were engaged in widening the base of the pact by including services and investments. However, talks were delayed due to differences among members of the bloc. "The three pillars of India-ASEAN economic relations are FTA in goods (which was finalised in 2009 and came into effect in 2010), services, and investments. The delay in reaching a consensus on FTA in services and investment can be attributed to the fact that there are ten nations having different issues and challenges, hence the complexities," as Cambodian Minister of Commerce, Cham Prasidh stated.

While inaugurating the second India-ASEAN business fair, organised by the Federation of Indian Chamber of Commerce and Industry, the Indian Commerce and Industry Minister Anand Sharma said that the negotiations for regional comprehensive economic partnership -- a mega trade agreement, comprising 16 countries of the region, including India and China -- were expected to conclude by 2015.

The highlight of the tomorrow's summit is expected to be a formal declaration of the conclusion of negotiations for a free trade agreement in services and investments, as promised by Indian PM Manmohan Sigh on the sidelines of last month's ASEAN summit in Phnom Penh. Further, a vision document based on a patchy eminent-persons group report will also be released.

Fortunately, all participating countries are strongly in support of the process of negotiations so that each can bring home an ambitious and balanced comprehensive agreement that would be in place once the services and investment chapter were is concluded. On the economic front, a comprehensive FTA won't be the end of the ongoing exercise. India will immediately join in negotiations for a Regional Comprehensive Economic Partnership (RCEP) covering 16 countries (the 10 ASEAN members in addition to its six Asian dialogue partners) which may take up to three years to finalise.

Under this scenario, emerging economic cooperation between India and ASEAN nations will be a great achievement for both the partners, with enough potential for an ever-growing multifarious partnership leading to all round growth and prosperity for all. Cooperation will add to their collective power and their ability to effectively stand against the rising menace of terrorism and other socio and political challenges. Further, their unity and strength will also deter outside powers from intervening in their internal affairs and will work as a powerful bulwark against undue sovereign claims by China over the South China Sea and other territories of many of the ASEAN nations, particularly Vietnam and the Philippines.