This Republic Day might usher in renewed trade and security ties with the Association of Southeast Asian Nations (Asean), whose leaders would be the guests of honour on January 26.
The 10-nation Asean has been moving increasingly closer to China. India has been looking to boost its trade and security ties with the block, and the Republic Day festivities might provide the apt platform.
The Asean is home to approximately 640 million people, 8.8 per cent of the world’s population, more than that of the European Union. In 2015, the organisation’s combined nominal gross domestic product (GDP) had grown to more than $2.8 trillion. If the Asean was taken a single entity, it would be the sixth largest economy in the world, behind the USA, China, Japan, France and Germany.
New Delhi’s trade and investment ties are lower than potential, at a little more than $71 billion. The government hopes to improve it to $200 billion by 2022. Currently, imports from the bloc exceed exports by $ 9.56 billion.
However, this is subject to successful outcome of the proposed Regional Comprehensive Economic Partnership (RCEP) deal by the end of 2018. The RCEP is a proposed free-trade agreement (FTA) between the 10 Asean economies and six others with which the grouping currently has FTAs — Australia, China, India, Japan, South Korea, and New Zealand.
While India and the Asean nations have shared similar as well as diametrically opposite positions on the variables of the deal — tariff reduction in goods and liberalisation of services trade, among others — the bloc has recently blamed Delhi for stalling the deal consistently. Asean nations had hoped to finish negotiations by 2017-end, the 50th foundation year of the bloc. But growing acrimony between India and developed economies such as South Korea and Australia on matters of agricultural trade and immigration has prevented that.
While the issues within RCEP will be discussed, a commerce ministry official said trade talks should be left to the official negotiation rounds, 20 of which have taken place till now apart from five ministerial meetings, three inter-session ministerials and one summit level talks between the heads of states. The next round,set to take place in Indonesia is not expected to drastically change the talks, the official added.
There are differences within the bloc as well, with smaller nations such as Cambodia and Laos maintaining vastly different trade positions from the commodity-heavy and much larger economies such as Malaysia and Indonesia. “India and China had earlier scrambled to gain the support of one nation or the other, effectively splitting the group,” a Delhi-based trade expert says.
However, all participating nations had last year announced that the RCEP should be completed by 2018, though member-nations have not agreed on several issues.