Indians will pay less and face fewer hurdles to buy products manufactured by their East Asian neighbors and vice versa, in a few years from now.
India and the 10-country Association of South East Asian Nations on Thursday concluded talks on a free trade pact that would create a common market of 1.7 billion consumers, cutting across some of the world’s fastest growing economies. A bit like the European Union.
The agreement, which would be formalised at the India-Asean summit in Bangkok slated for December, would allow seamless and duty-free movement of goods across territories. It will come into force from January next year.
Both sides will eliminate import duties on a whole host of manufactured products by December 31, 2012. This is India’s fourth FTA, after Sri Lanka, Thailand and Singapore
Commerce and Industry Minister Kamal Nath described the agreement, as a “key regional milestone.”
The pact comes at a time when social and cultural exchanges between India and its East Asian neighbors are leapfrogging — from beaches of Pattaya in Thailand to Malaysia’s Genting Island or the shopping streets of Singapore, more Indians are vacationing in this region than anywhere else.
On the trade front, both India and Asean have emerged as key markets for each other. Bilateral trade that totalled $ 38 billion last year is projected to touch $ 50 billion by 2010. The free trade pact could accelerate it.
“Countries of East Asia are important drivers of growth with large consumption to drive global economies,” Nath said.
Asean comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Thailand, Singapore and Vietnam.