Free trade with Asean to open up bigger prospects

May 15th, 2011 - 1:08 pm ICT by IANS  

New Delhi, May 15 (IANS) The India-Asean (Association of Southeast Asian Nations) Free Trade Agreement (FTA) will open up a host of business opportunities for Indian industry, especially in the construction sector, says a study.

“Indian companies could seriously look at the current open project tenders in the Asean region in construction-related activities such as construction of agricultural buildings, bridges, canal, roads and highways, sports facilities and water-treatment plants,” said a joint study by the Federation of Indian Chambers of Commerce and Industry (FICCI) and Deloitte.

According to the study, Asean countries would also provide opportunities in service categories such as machinery, computers and supplies, industrial process control equipment, optical instruments, horological instruments to name a few.

The FTA, which was signed in Bangkok Aug 13, 2009, with Malaysia, Thailand and Singapore and came into effect from Jan 1, 2011, is expected to be in place with all the member countries by 2016.

Apart from these three members, the Asean countries also include Brunei Darussalam, Cambodia, Indonesia, Laos, Myanmar, the Philippines and Vietnam.

The agreement collectively covers a market of nearly 1.8 billion people and proposes to gradually slash tariffs for over 4,000 product lines.

Currently the FTA is restricted to trade in goods while negotiations for a similar agreement for services are going on.

According to the study, Indian industries such as chemicals, pharmaceuticals, textiles, handicrafts and carpets enjoy greater competitive advantage as compared to their counterparts in the Asean.

Asean industries such as machinery and applications and electrical equipment enjoy larger competitive advantage than their counterparts in India.

These are the industries that will reap greater benefit once the India-Asean free trade agreement becomes fully operational with all the countries of the trade bloc.

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