Tuesday, October 8, 2013

Examine the implications of India-ASEAN Free Trade Agreement in services and investment for the Indian economy? (200 Words)

Answer: ASEAN group is the 4th largest trading partner of India. India and 10 member bloc ASEAN trade is already touching 80 billion USD. Once the FTA in service & investment is in place, two way trade is expected to cross the 100 Billion USD and support the India economic growth. FTA in Goods was signed in 2009 that benefitted the ASEAN countries more due to their competitive advantage. India growth story has been led by service sector. In wake of Visa issues & sluggish economic growth in traditional export market (EU& US), India-FTA agreement will open new export markets for India service industry such as IT, telecommunication, e-commerce etc. FTA agreement will also make the flow of Indian origin people to the ASEAN that will includes contractual service suppliers and individual professionals in fields of accounting, architecture, engineering services, medical and pharmacy, management consulting etc.
FTA also will open up investment opportunity for Indian companies in area like Information & communication technology, automobiles, Pharmaceuticals. ASEAN countries are better positioned to provide construction, engineering, transportation services that can benefit Indian economy. ASEAN investment in Indian energy, transport and logistics sector will help to reduce the infrastructure deficit in the country.

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