Hot on the heels of the Cancun breakdown, India announces a new trade deal with the south East Asian Nations.
India is to sign an agreement next week with the 10 member states of the Association of South East Asian Nations (Asean) leading to the creation of a full free trade area within a decade. Yashwant Sinha, India's foreign minister, said the framework agreement had been negotiated over the past year, and would be signed next week at the Asean summit in Bali, Indonesia. India is also close to signing bilateral trade deals with both Singapore and Thailand. "We are getting much more deeply engaged in south-east Asia," Mr Sinha told the Financial Times in an interview in London. "This will certainly boost our trade and economic relationship with the region."
Progress on negotiating the framework agreement with Asean has been unusually rapid by Indian standards, in a sign of the importance of the deal to both sides. India has watched with some misgivings neighbouring China's dramatic trade growth with Asean over the past decade. But Indian officials say Asean also wants to counter-balance China's growing economic dominance of the region by strengthening ties with a market the size of India. Indian exports to Asean were $4.8bn last year, just 8 per cent of its total exports. Officials say this could rise sharply.
The deal would go some way to answer those critics who point out that India imposes higher tariffs on developing country imports than on western ones. India has been criticised for playing an influential role in helping bring about a collapse of the trade talks in Cancun last month. "If we have regional trading arrangements with Asean, they will become beneficiaries of lower tariffs with India," said Mr Sinha.
Source: Financial Times