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The government on Monday said that two-way trade between India and Association of South East Asian Nations had the potential to more than double to $30 billion in next three years but it was necessary to put in place a low tariff regime.
Slide Show: Arm in arm with ASEAN
"The two-way trade between India and the ASEAN countries has today reached $12.5 billion. It is our expectation that this number could go up to $30 billion in the next three years," R M Abhyankar, secretary for Asia and North Africa, ministry of external affairs said while addressing a session at CII-WEF organised India Economic Summit 2003 in New Delhi.
He said that Free Trade Agreement, which has been signed with Thailand and Closer Economic Co-operation Agreement with Singapore, which is to be finalised, would help achieve this target.
"So far as Indo-ASEAN trade is concerned, we have the early harvest schemes both in the Thailand FTA and in the Indo-ASEAN FTA. The need is to quickly get these in place across a broad front so that tariffs and non-tariff considerations do not become a hindrance to meet our trade targets," he said.
"Under the Framework Agreement for Closer Economic Co-operation signed between India and ASEAN, an early harvest will commence from January 1, 2004."
Abhyankar said ASEAN accounted for only 6.2 per cent of foreign direct investment approvals.
"ASEAN FDI approvals are around $4.15 billion mainly from Malaysia, Singapore, Thailand, Indonesia and the Philippines," he said adding that the actual FDI inflow was substantially less.
"There is a need to close the gap between the approved and the delivered levels of investments," he said.
Moreover, the investments were concentrated around sectors such as power and refining, telecom and electrical equipment.
"Other areas, particularly the services sector, IT related services, hotel and tourism hold promise," he said.
"We have seen a number of Indian IT companies and professionals moving out to the ASEAN countries. Especially with Thailand we need to consider joint projects in microelectronics, primarily for the Indian market but also for the world market," he said.