Financial Express | 3 October 2014

Asean free trade agreement review shows India ’got almost nothing’

Shruti Srivastava | New Delhi

This is first such pact signed by NDA govt, which had, ironically, ordered a review of all existing FTAs...

Barely a month after the government sealed the trade pact in services and investments with the Asean, an internal assessment of the deal that has been placed before the Cabinet Secretariat concludes that India has got “almost nothing” by signing the agreement.

This is the first such pact signed by the government, which had, ironically, ordered a review of all existing free trade agreements (FTAs) signed by the previous dispensation on the grounds that these pacts were “not leveraged adequately in some cases”.

India had formally signed the services and trade agreements with the 10-member Association of Southeast Asian Nations (Asean) early last month, two years after the discussions on the pact concluded. It had implemented the FTA in goods with Asean members in 2010.

On September 9, the commerce ministry had issued an official statement saying, the pact “will open up opportunities of movement of both manpower and investments from either side between India and Asean”. Inclusion of movement of natural persons, i.e. ‘Mode 4’, will provide “commercially meaningful market across in Asean for our professionals, including those from the IT/ITeS sector”, the statement had said.

However, a senior government official told The Indian Express that the assessment made to the Cabinet Secretariat has countered this view and specifically points to India having got a raw deal.

“The Asean members wanted a single MFN (most favoured nation) offer against their individual offers. India yielded to the condition but asked for Asean-Australia-New Zealand (AANZ) agreement-plus offer. However, it did not get that. India had to table different offers to eight members of Asean, while one each to the Philippines and Indonesia,” the official said.

A mail sent to the spokesperson of the commerce ministry on the issue remained unanswered. Calls and text message sent to commerce secretary, Rajeev Kher, did not elicit any response on the issue. Commerce and industry minister Nirmala Sitharaman could not be reached for comments despite repeated calls, text messages, and an e-mail sent on the issue.

‘Mode 4’ includes the presence or movement of natural persons like doctors, engineers, consultants, accountants etc., who supply services in another country. As India has a stronghold on the services sector, it is one of the key interest areas for the country.