CII Calls for Leveraging India’s Strength in Services in Accessing ASEAN Markets and Also Attracting FDI

India, January 5th, 2010 / IndiaPRLine / — CII has said that the current negotiations on Services between India and ASEAN as part of the FTA structure is very important since India’s strength in the sector could be hugely leveraged to even attract foreign capital. This was stated in a press release issued here today.

The CII release said that the India-ASEAN FTA provides Indian industry a great opportunity to adapt to a globally competitive environment and build supply chain linkages with ASEAN economies that would be at the centre of an increasingly integrated Asian economy.

Indian industry has shown that it is more than up-to the challenge of meeting global competition since the economy opened up in the late 1990s. Indian firms have done well across most sectors despite drastic drop in tariff and other forms of protection. Industry’s longer term interest lies in investing in competitiveness and developing cross-border linkages that add value to their businesses. It needs to be pointed out that there are several issues that hinder India’s competitiveness ranging from poor infrastructure, high-costs of regulatory compliance, and high cost of energy to problems related to acquiring capital especially for the Small and Medium segment of industry. The policy challenges of the future lie in giving a priority to resolving these issues through a dialogue between government and industry with time bound implementation programmes, the CII release said.

CII has said that the India-ASEAN FTA should be seen in light of the evolving economic relationships in Asia and India’s need to be a major player in an integrated Asian market of the future. Industry and government needs to work together to ensure that the ASEAN member states implement the agreement in a fair manner and non-tariff barriers are not allowed to hinder Indian industry’s market access to the region. The services part of the India-ASEAN FTA that is being negotiated will be crucial as India seeks market access for its IT, ITES, health, education and other services in ASEAN with its rapidly growing middle-class. A priority for CII would be to develop the business to business relations between Indian and ASEAN industry stakeholders to develop cross border trade and investment relations that are beneficial to both India and ASEAN.