Ever since India announced its ?look east? policy in 1991 seeking greater engagement with east-Asian countries and building upon historical links with the region, there has been no looking back. Jyotiraditya Scindia, minister of state, commerce and industry, tells Sarika Malhotra that even as China is actively pursuing trade agreements in the region and has made an early start compared to us, India is actively involved in the east Asian integration of 16 countries?Australia, ASEAN, China, India, Japan, Korea and New Zealand. Excerpts:
What role will the India-ASEAN FTA play in the changing trade dynamics?
It is too early to comment, but the role would be very positive. The India-ASEAN Trade in Goods Agreement came into force on January 1 this year in respect of India and Malaysia, Singapore, Thailand and in respect of India and Vietnam with effect from June 1. In the case of other countries, it will come into force after they complete their internal requirements. We would have a good picture of the trade dynamics once all the countries are on board. The current India-ASEAN trade is $45 billion and we aim to reach $70 billion in two years from enforcement of the FTA. There is a huge potential for India and ASEAN countries to benefit from the FTA, which will facilitate creation of an open market for the India-ASEAN region, comprising about 1.7 billion people and with a combined gross domestic product of approximately $2.75 trillion.
There is growing demand to get services and information technology into the FTA purview. Any development on it?
India and ASEAN are currently negotiating Agreements on Trade in Services and Investment which are targeted to be concluded by August. India is strong in the field of IT and would look forward to market access in ASEAN through the services agreement.
There are some apprehensions with respect to the negative list to prevent India from becoming a dumping ground. Is there a review of the list in sight?
Under the India-ASEAN FTA, each country (excluding Singapore) has maintained an exclusion (negative) list to address its respective domestic sensitivity. India has excluded a large number of items from the list of tariff concessions to address our sensitivities in agriculture, textile, auto, chemical and other sectors. Even though the FTA provides for a review clause, India would not make any revision of the lists that is detrimental to the interests of its domestic constituents and stakeholders.
There are criticisms from some quarters that regional trade agreements are politically motivated with very little economic gains. What are your views on it?
I do not agree with that view. Our FTAs have been negotiated keeping in view our commercial interests and based on inputs from all the stakeholders. The FTAs signed by us are open for scrutiny and research. If you study these agreements, you would find that there are gains on the economic front. The success of an agreement also depends on how well our businesses exploit the provisions to their benefit.
Going ahead, what will be the key sectors to focus on between India and SEA?
We look forward to a shift in India-South-East Asia trade from agricultural goods to manufacturing and processed goods. We also hope to see enhanced trade in services between the countries. The FDI levels between India and ASEAN have already seen a steady rise and we envisage higher levels after the signing of the India-ASEAN Services & Investment Agreement.
Of late, India seems to be looking beyond Singapore in SEA. What accounts for this?
Under our ?look east? policy, we have been pursuing the entire region actively. Singapore has been the first east Asian country with whom we have entered into a comprehensive FTA. Since the signing of the agreement, our bilateral trade with Singapore doubled and Singapore became the second largest source of FDI into India. We continue to engage with Singapore through the ASEAN FTA and the review of the India-Singapore CECA. Our pursuit of other east Asian countries is part of our ?look east? policy and we are pursuing trade agreements with Thailand, Japan, Malaysia and New Zealand apart from the BIMSTEC.