India- ASEAN Trade Relations
• In 1992, India became ASEAN’s sectoral dialogue partner, a Full Dialogue Partner in 1995 and a member of the ASEAN Regional Forum (ARF) in 1996.
• In 2003, a Framework Agreement – the Comprehensive Economic Cooperation Agreement (CECA) was signed to provide an institutional framework to enable economic cooperation. • In 2009, India-ASEAN Free Trade Agreement (AIFTA) was signed in Bangkok.
• ASEAN-India Free Trade Area entered into force by the ASEAN-India Agreements on Trade in Service and Investments on 1 July 2015.
• 2017 marked 25 years of dialogue partnership between India and ASEAN, and five years of the strategic partnership.
• ASEAN is India's fourth-largest trading partner.
• Major exports from India to the region: Ships, boats, floating structures, mineral fuels, mineral oils and meat.
• Major imports: telecom equipment, electrical machinery, mineral fuels, mineral oils and animal or vegetable fats and oils.
ASEAN AND ITS SIGNIFICANCE (part 1)
Introduction
◆ASEAN, or the Association of South East Asian Nations, comprises of Indonesia, Singapore, Philippines, Malaysia, Brunei, Thailand, Cambodia, Lao PDR, Myanmar and Vietnam.
◆The ASEAN secretariat is located at Jakarta, Indonesia. Interestingly, ASEAN was created in the year 1967 and before that, there existed another organisation, called the Association of South East Asia (ASA). This group consisted of Thailand, the Federation of Malaya and the Philippines.
◆The founding members who signed the ASEAN declaration, are only five countries- Indonesia, Singapore, Thailand, Malaysia and the Philippines.
ASEAN and India
●Since the year 1996, India has been attending the ASEAN Regional Forum and has been an active participant in all its activities.
●The ASEAN defence minister’s meeting is the highest defence consultative in this region and brings together all the ten ASEAN nations under one roof.
●Trade relations between the ASEAN and India are quite strong. Reports suggest that ASEAN stands at Eighty-one Billion (US dollars), which is approximately 11 per cent of India’s overall trade. With regard to the total exports, India stands at twelve per cent of the total exports.
●ASEAN also accounts for nearly nineteen percent of the total investment flows, computed since the year 2000. In fact, FDI inflows into India from ASEAN for the last two decades was about seventy billion and the FDI outflow was about Forty billion, as per records maintained by the Ministry of External Affairs.
●An important point to note is the ASEAN- India free trade Area. This agreement has been completed on July 1st 2015, is an important development in economic growth for India as well as ASEAN.
●Another sector that India aims to engage itself better in the private sector. With regards to this, the ASEAN Business Council was set up in 2013, March. The council was held in Kuala Lumpur, and worked as a forum to bring aboard key private sector players from India and all the ASEAN countries.
●The aim is to bring all the major players from all the countries mentioned, on a single platform, as an efficient method to network for business and share novel ideas for setting up new practices.
ASEAN’s Significance
◆It is the declaration of ASEAN that lists out its aim and purpose. Very simply, it promotes the economic growth of the Ten countries that is located south of China.
◆Therefore, the purpose of having an organisation such as ASEAN is to aim to create an economic market in South East Asia that work similarly to the European Union. It works on creating a unified trading bloc.
◆The multilateral trade agreements between all these countries who are part of ASEAN reduces the need for a world trade organisation, which has often been criticised for its rules and functioning. ◆Additionally, ASEAN is not the first organisation apart from the WTO that aims to have a unified trading bloc among the countries.
◆There are over thirty economic groupings in the world, of some kind and of different sizes. Most of them are located in the nations of Europe, Asia, Africa and the Middle East. All of these ‘groups’ have their own multilateral agreements between them, which is beneficial to their nations and also promotes and protects trade.
◆However, a distinctive feature is that while the groups in Asia and America are led by Political forces, the ones in Asia, such as the ASEAN are driven purely by the market forces, i.e., economic needs. ◆It aims to make easier the movement of goods and services across the countries.
◆Another reason that the ASEAN is such an important organisation in today’s world is that it also focuses on creating a common standard for intellectual property rights, agriculture. Defence and foreign policy are also two of its important areas to facilitate growth.
