India, ASEAN to start talks on opening services trade soon
After signing a Free Trade Agreement that will eventually lead to duty-free commerce for bulk of the trade, India and the 10-nation ASEAN bloc are set to start talks for opening the crucial services sector.business Updated: Sep 20, 2009 11:07 IST
After signing a Free Trade Agreement that will eventually lead to duty-free commerce for bulk of the trade, India and the 10-nation ASEAN bloc are set to start talks for opening the crucial services sector.
"Negotiations for the free trade pact (between India and ASEAN) on services sector will begin soon," Ambassador of Thailand 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, the Thai ambassador said "safeguard measures" will have to be incorporated before finalising the pact.
"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 $ 6 billion.
India last month signed an agreement with the Association of Southeast Asian Nations (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. Pushing for open sky policy between the two countries, Kraichitti strongly favoured increasing the number of flights from India to various destinations in Thailand "as it will help both the economies".
The bilateral traffic rights agreement between the two countries allowed a total of 18,671 aircraft seats per week from Thailand to India and vice versa.
Kraichitti said cooperation in tourism sector should be strengthened as the two countries had strong cultural ties.