Deloitte: ASEAN will benefit more from FTA with India
March, 03rd 2011
India's free trade agreement (FTA) with Asean will benefit the 10-nation bloc more, although it will provide greater competitive advantage to several Indian industries like textiles and pharma, according to Deloitte.
Noting that the FTA will increase the flow of goods, global consultancy firm Deloitte said the net benefit for India will be positive in the long run.
"There is going to be benefit for India, but asymmetrically Asean will benefit more than India," Deloitte's Senior Director Shanto Ghosh told PTI today.
Asean nations already export more to India. The bilateral trade touched USD 50.33 billion in 2010, with exports to India valued at USD 27.8 billion.
Ghosh said the government should focus sharply on coordinating various policies to be able to "really realise the potential of free trade" with Asean.
Deloitte, in association with industry body FICCI, has released a white paper on India-Asean Free Trade Agreement.
Association of South East Asian Nations (Asean) is a grouping of 10 countries including Singapore and Indonesia.
FTA with Asean was inked in August 2009 and has been implemented with eight countries so far, including Malaysia , Thailand and Singapore.
Ghosh said the pact would provide greater competitive advantage for at least four domestic industries -- chemicals, medical & pharmaceutical products, textiles, apparel & accessories and handicrafts & carpets.
On the other hand, the machinery & appliances and electrical equipment industries in the Asean region would have more competitive edge due to the trade pact.
The FTA proposes to bring down the tariffs for over 4,000 product lines.
Presently, the pact is restricted to trade in goods and discussions are underway for an agreement on services sector.
"A large part of the future benefits of trade will be enhanced if we include services in trading basket," Ghosh added.
As per the report, the FTA would open up better opportunities for Indian businesses in Malaysia, Singapore, Indonesia, Thailand and Philippines.