ASEAN AND INDIA AND NORTH EAST

20 sEPT 2009
nEW dELHI

Ater signing a free trade agree ment (FTA) that will eventually lead to duty free commerce for bulk of the trade, India and the 10na tion Association of Southeast Asian Nations (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 said. He, how ever, said given the complex nature of issues involved among India and ten countries of SouthEast Asia, it would take about two years for the negotia tions to conclude.

Services sector is of key interest to Indian economy as it contributes over 55% to the gross domestic product. It is also emerging as an important area for export earnings for the coun try. But the sector faces hurdles such as harsh domestic regulations, includ ing those relating to visa, and the com plex 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 finalizing 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 "finalized carefully".

Seeking greater trade ties with India, Kraichitti said the IndoAsean FTA, to come into operation from 1 January next year, would not only enhance the regional trade but also bilateral trade between India and Thai land. He hoped that India's `Look East Pol icy' 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 agree ment with Asean for dutyfree 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 coopera tion agreement was signed after six years of negotiations