The Telegraph
Since 1st March, 1999
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India, Asean to ink free trade framework

New Delhi, Oct. 2: India is set to sign a framework agreement with the Association of South East Asian Nations (Asean) at their Bali summit next week that is likely to usher in a free-trading arrangement in the region in less than a decade.

The move, coming soon after India was seen as having played the key role in the collapse of the Cancun trade talks by insisting on a higher tariff for imports by developing countries, bears out the maturing of the “Look East” policy undertaken by Delhi more than a decade ago.

The recognition accorded to India as a major player in the region is clear from the fact that Delhi, along with China, has been invited to sign the additional protocol to accede to Asean’s Treaty of Amity and Cooperation. It will pave the way for greater interaction between India and the southeast Asian nations on security.

A joint statement on counter-terrorism and cooperation between Delhi and Asean members to face the scourge of terrorism will also be signed at the summit, to be attended by Prime Minister Atal Bihari Vajpayee and a high level delegation on October 7 and 8.

The indication of a free-trade agreement between India and Asean emerged last year. Over the past several months, the two sides have worked hard to put in place the framework agreement that will be initialled next week. The firming up of the framework within a year has surprised many and won admiration for Delhi outside the country.

“We are getting much more deeply engaged in southeast Asia,” the Financial Times quoted foreign minister Yashwant Sinha as saying. “If we have regional trading agreements with Asean, they will become beneficiaries of lower tariffs with India.”

Key players in the region are interpreting the move as Delhi’s seriousness in taking urgent steps towards deepening economic ties with southeast Asia. Others feel the phenomenal growth of trade between China and Asean was key to India getting the framework ready in record time.

Some sections have suggested that Asean is trying to upgrade ties with India as part of its gameplan to counterbalance China’s growing economic clout in the region. Indian exports to Asean were $4.8 billion last year, just 8 per cent of its total exports.

Asean comprises Brunei, Laos, Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Vietnam, Singapore and Thailand. India’s interaction with the group gained substance in the early 1990s when then Prime Minister P.V. Narasimha Rao launched his “Look East” policy with a view to deepen economic ties with the fast-growing region.

The subsequent years not only witnessed a strengthening of ties between Delhi and Asean on the economic front, but also in the political and security related areas. The icing on the cake was the acceptance of Delhi as a full dialogue partner of the Asean Region Forum (ARF) — a high profile body boasting of almost all the leading world players.

Despite the initial criticism, India’s nuclear tests in May 1998 made an impact in the region and many in Asean — since most of its members have boundary disputes with China — saw Delhi as a viable counter-balance to Beijing.

The progress made by Indian firms in the field of information technology and Delhi’s seriousness to open its market further for foreign investment has encouraged key players in southeast Asia to now see India as a country with which it can do business.

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