A day after Minister of State for Commerce and Industry Nirmala Sitharaman decided to cancel her trip to Myanmar, where she was to sign a long-awaited services and investment trade pact with Association of Southeast Asian Nations (Asean) member-countries, the government changed its mind and opted for a circulation process.
In other words, India has now proposed the draft free trade agreement (FTA) on services and investment will be circulated to all Asean members, which will sign it individually.
However, a consensus hasn’t been reached on this proposal. “India has proposed signing the services and investment agreement through a circulation process.
However, it is subject to all (Asean) member states agreeing to this,” an official involved in the talks told Business Standard.
The move was proposed by India during consultations with Asean member countries on Tuesday, even as the signing ceremony was scrapped as Sitharaman couldn’t attend the meeting.
Sitharaman has been made in-charge of Prime Minister Narendra Modi’s financial inclusion scheme, Jan Dhan Yojana, to be launched in New Delhi on Thursday.
India had been negotiating the FTA in goods, services and investment with the 10-member Asean block since 2005.
Though the goods deal was implemented in January 2010, it is yet to be ratified by all member states.
The final text of the FTA in services was negotiated and agreed to in December 2012.
Prime Minister Modi has been emphasising greater focus on the Asean region.
On Tuesday, External Affairs Minister Sushma Swaraj said India should not only “look East”, but also “act East”.
One of the primary hurdles to the services FTA was India’s growing power in the services segment, due to which countries such as the Philippines and Indonesia are learnt to apprehensive.
India’s primary interest is to gain greater market access for its professionals in some developed Asean member countries such as Singapore, Malaysia and Thailand, coupled with a relaxed visa regime.
It has been planned if an FTA in services and investment is signed, it should be operationalised by July 2015.