New Delhi awaits new Thai govt to finalise bilateral pact
India is ready to sign a comprehensive free-trade agreement with Asean and a bilateral one with Thailand soon to ensure continued cooperation with Southeast Asian nations, hoping to take part in the expected benefits from regional integration while serving India’s “Look East” policy.
However, India is waiting for Thailand and others to put new governments in place before signing the FTAs.
Indian External Affairs Minister Salman Khurshid said his country understood Thailand’s situation and would wait patiently for the right time to sign a bilateral FTA. India expects Thailand to get a new government soon so that the pact can be finalised.
Although trade deficits are always a risk of liberalisation, India can compensate by investing more in each target country and thereby improving the trade balance. This is a win-win strategy, the minister said.
Thailand and India have already implemented some trade liberalisation in the goods sector. The two sides recently also came to a tentative agreement on the service and investment sectors, which they hope to ratify this year.
Khurshid said that after closer cooperation is established, India expected to boost two-way investment.
According to the External Affairs Ministry, India targets bilateral trade with Asean totalling US$100 billion by 2015, and to $200 billion by 2020. Last year Asean-India trade was valued at $76 billion (Bt2.45 trillion). With a combined population of 1.8 billion and total gross domestic product close to $4 trillion, India is confident such trade targets are achievable.
Anil Wadhwa, secretary (east) of the ministry, said India had already finalised its negotiations with Thailand and Asean on comprehensive pacts covering trade in goods, services and investment.
“India is waiting for Asean countries to complete their processes for signature. Also, we are waiting for Thailand to have a new government so that we can sign the comprehensive FTA for boosting trade and investment sustainably,” he said.
Wadhwa added that after a comprehensive pact between Thailand and India had been imposed, trade and investment should grow strongly, by 30-40 per cent a year.
India also expects that the highway connecting it with Myanmar and Thailand will be completed by 2016, and that this land connection will be an efficient gateway for India and Asean countries to enhance trade, tourism and investment. This trilateral highway will connect Moreh in the northeastern Indian state of Manipur to Mae Sot in Thailand’s Tak province.
To promote closer cooperation and exchange ideas between India and Asean, the sixth Delhi Dialogue was held late last week in the Indian capital. Foreign ministers or representatives from the 10 Asean states joined in.
So far, India and Asean have 26 dialogue mechanisms across sectors such as agriculture, trade, tourism, science and technology, energy (new and renewable), environment, and small and medium-sized enterprises.