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June 25, 2010

Since its start about a decade ago, the partnership between India and the Association of South East Asian Nations (ASEAN) comprising Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam has been developing at quite a fast pace.

India became a sectoral dialogue partner of ASEAN in 1992. Mutual interest led ASEAN to invite India to become its full dialogue partner during the fifth ASEAN Summit in Bangkok in 1995. India also became a member of the ASEAN Regional Forum (ARF) in 1996. India and ASEAN have been holding summit-level meetings on an annual basis since 2002.

In August 2009, India signed a Free Trade Agreement (FTA) with the ASEAN members in Thailand. Under the ASEAN-India FTA, ASEAN member countries and India will lift import tariffs on more than 80 per cent of traded products between 2013 and 2016, according to a release by the Ministry of Commerce and Industry.

In January 2010, Singapore, Malaysia and Thailand accepted the FTA on goods. The other seven ASEAN countries are expected to operationalise the FTA by August 2010.

India and ASEAN are currently negotiating agreements on trade in services and investment. The services negotiations are taking place on a request-offer basis, wherein both sides make requests for the openings they seek and offers are made by the receiving country based on the requests.

India has made requests in a number of areas including teaching, nursing, architecture, chartered accountancy and medicine as it has a large number of English speaking professionals in these areas who can gain from job opportunities in the ASEAN region. India is also keen on expanding its telecom, IT, tourism and banking network in ASEAN countries.

Trade

The deepening of ties between India and ASEAN is reflected in the continued buoyancy in trade figures.

India’s trade with ASEAN countries has increased from US$ 30.7 billion in 2006-07 to US$ 39.08 billion in 2007-08 and to US$ 45.34 billion in 2008-09. During April – September 2009-10, India’s trade with ASEAN was US$ 20.19 billion, according to data released by the Ministry of Commerce and Industry.

In 2008-09, India's exports to ASEAN totalled US$ 19.14 billion. During April-December 2009-10, India exported goods worth US$ 12.8 billion to ASEAN, according to data released by the Ministry of Commerce and Industry.

India imported goods worth US$ 26.3 billion in 2008-09 from ASEAN. During the period April-December 2009-10, India's imports from ASEAN totalled US$ 18.09 billion, according to data released by the Ministry of Commerce and Industry.

Singapore

The growing bilateral economic relationship is reflected in the rapidly rising bilateral trade between Singapore and India. Singapore continues to be the single largest investor in India amongst the ASEAN countries and the second largest amongst all countries with foreign direct investment (FDI) inflows into India, totalling US$ 2.4 billion in 2009-10. The cumulative FDI inflows from Singapore during April 2000 and March 2010 were US$ 10.2 billion, according to data released by the Department of Industrial Policy and Promotion (DIPP).

The total bilateral trade during 2008-09 was US$ 16.1 billion, an increase of 3.86 per cent over US$ 15.5 billion in 2007-08, according to data released by the Ministry of Commerce and Industry.

During 2008-09, India exported goods worth US$ 8.45 billion to Singapore. During April-December 2009-10, Indian merchandise exports to Singapore totalled US$ 5.12 billion, comprising mainly of mineral fuels and oils, ships, boats and floating structures and natural pearls, gems and jewellery, according to data released by the Ministry of Commerce and Industry.

According to a press release issued by the Ministry of Commerce and Industry, in May 2010, Mr Anand Sharma, the Union Minister of Commerce and Mr Lim Hng Kiang, Minister for Trade and Industry, Singapore, agreed on a bilateral economic roadmap to take the India-Singapore Comprehensive Economic Cooperation Agreement (CECA) forward in the coming five years. As per the roadmap the two countries will work towards doubling the annual bilateral trade by 2015. Moreover, they will promote greater business and investment flows by identifying ways in which Indian businesses can leverage on Singapore as a business hub in the Asia Pacific to support their international expansion.

The two countries will also explore and develop co-operation, in science and technology, intellectual property rights, and media.

India-Singapore Bilateral Economic Roadmap includes:

  • Increase two-way flow of tourists, businessmen and professionals
  • Expedite conclusion of mutual recognition agreements (MRAs) for dentistry, medical, nursing, architecture, accountancy and company secretary professionals on priority
  • Explore expansion of the provisions of CECA to liberalise and facilitate movement of Indian professionals to Singapore.
  • Develop closer co-operation in tourism

Moreover, according to Standard Chartered Bank, the business between India and Singapore is set to double in the next five years. The number of Singapore-based companies setting up operations in India, 350 at present, is expected to double in the next five years. Similarly, India-based business community in Singapore is likely to increase to 5,500 companies from the present 4,000 in the next two and a half years.

Malaysia

The bilateral economic relationship between India and Malaysia has been steadily moving ahead. Malaysia has been a huge source of FDI for India. In fact, Malaysia is the 25th largest overall investor and third largest investor among ASEAN countries with a total inflow of US$ 252.97 million during the April 2000-March 2010 period, according to data released by the Department of Industrial Policy and Promotion.

Bilateral trade among the two countries amounted to US$ 10,604.75 million during 2008-09, an increase of 23.48 per cent over 2007-08, according to data released by the Ministry of Commerce and Industry.

India exported goods worth US$ 3.42 billion to Malaysia in 2008-09. During April-December 2009-10, India’s exports to Malaysia totalled US$ 2.14 billion, comprising ships, boats and floating structures, mineral oils and fuels, and organic chemicals, according to data released by the Ministry of Commerce and Industry.

Indians play an important role in promoting tourism in Malaysia. Following a 7.1 per cent growth in revenues from Indian tourists in 2009, Malaysia expects 650,000 visitors from India in 2010, according to the Director General of Malaysia Tourism.

Moreover, Indian biotech companies are increasingly looking at making investments in Malaysia. Malaysia is positioning itself as a cost-competitive country and a regional hub for global biotech companies. It is attracting Indian companies with a large number of sops including a 10-year tax holiday, duty exemptions, customised incentives for large investments, access to ASEAN markets through free trade agreements and no restrictions on equity.

Thailand

Bilateral trade between the two countries touched US$ 4.6 billion in 2008-09, as compared to US$ 4.12 billion in 2007-08, registering a growth of 12.9 per cent, according to data released by the Ministry of Commerce and Industry.

India exported goods worth US$ 1.94 billion in 2008-09 and worth US$ 1.25 billion during April-December 2009-10, to Thailand which included natural pearls, gems and jewellery, residue and waste from food industries and organic chemicals, according to data released by the Ministry of Commerce and Industry.

Total FDI inflow during the period April 2000-March 2010 from Thailand was US$ 77.97 million, according to data released by the Department of Industrial Policy and Promotion.

India and Thailand are targetting bilateral trade worth US$ 12 billion by 2012. In May 2010, the Thai Deputy Minister of Commerce, Alongkorn Ponlabhoot said, "We are hoping that the increase in trade would be generated through cooperation under various agreements like the BIMSTEC, the Asean-India FTA and the proposed Thailand-India FTA."

Indonesia

Bilateral trade between India and Indonesia totalled US$ 9.3 billion in 2008-09, an increase of 32.08 per cent over US$ 6.99 billion in 2007-08, according to data released by the Ministry of Commerce and Industry.

During the period 2008-09, India exported goods worth US$ 2.56 billion to Indonesia. During April-December 2009-10, India exported goods worth US$ 2.3 billion to Indonesia comprising mainly of organic chemicals, mineral fuels and ships and boats, according to data released by the Ministry of Commerce and Industry.

India and Indonesia are targetting bilateral trade worth US$ 20 billion by 2020 according to Indonesian ambassador to India, Andi M Ghalib.

Indonesia is an important source of FDI for India. It is the 16th largest FDI investor amongst all countries and the second largest amongst the ASEAN countries. FDI inflows from Indonesia into India totalled US$ 604.28 million during April 2000-March 2010, according to data released by the Department of Industrial Policy and Promotion.

Myanmar

During 2008-09, India exported goods worth US$ 221.64 million to Myanmar comprising mainly of pharmaceuticals and iron and steel. Bilateral trade stood at US$ 1.15 billion during 2008-09, an increase of 15.7 per cent over US$ 994.45 million in 2007-08, according to the latest data by the Ministry of Commerce and Industry.

During April-December 2009-10, India’s exports to Myanmar totalled US$ 159.77 million, according to the latest data by the Ministry of Commerce and Industry.

FDI inflows from Myanmar into India totalled US$ 8.96 million in the period April 2000-March 2010, according to data released by the Department of Industrial Policy and Promotion.

Vietnam

Bilateral trade between India and Vietnam grew to US$ 2.15 billion in 2008-09 from US$ 1.78 billion in 2007-08, registering a growth of 20.38 per cent, according to the latest data by the Ministry of Commerce and Industry.

Indian exports to Vietnam in 2008-09 totalled US$ 1.7 billion, while India exported goods worth US$ 1.25 billion from Vietnam during April-December 2009-10 comprising mainly of residues and wastes from food industries, animal fodder, meat and cereals, according to the latest data by the Ministry of Commerce and Industry.

Philippines

Bilateral trade between India and Philippines was worth US$ 998.54 million in 2008-09 as compared to US$ 824.87 million in 2007-08, an increase of 21.05 per cent, according to the latest data by the Ministry of Commerce and Industry.

Indian exports to Philippines during 2008-09 totalled US$ 743.77 million. During April-December 2009-10, India exported goods worth US$ 534.38 million to Philippines, comprising chiefly of meat, iron and steel and vehicles other than railways, according to the latest data by the Ministry of Commerce and Industry.

Cambodia

During 2008-09, bilateral trade between the two countries stood at US$ 49.61 million. India exported goods worth US$ 46.90 million to Cambodia in 2008-09. During April-December 2009-10, India exported goods worth US$ 30.53 million, chiefly comprising pharmaceuticals, cotton and tobacco, according to the latest data by the Ministry of Commerce and Industry.


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