East Asia Summit East Asia Summit

Keynote Address by Secretary(East) at the Roundtable on “ASEAN-India: Integration and Development” at the ASEAN-India Centre at RIS India Habitat Centre (October 27, 2015)

October 27, 2015

Amb. Shyam Saran, Chairman, RIS
Mr. Shreekant Somany, Chairman, CII (NR)
Prof. Sachin Chaturvedi, Director-General, RIS
Prof. Prabir De, Coordinator, ASEAN-India Centre

Ladies and Gentlemen,

1. I extend a warm welcome to all participants present at today’s curtain raiser event to the 13th ASEAN-India Summit and the 10th East Asia Summit, which will take place in Kuala Lumpur on 21-22 November, 2015. I also compliment the ASEAN-India Centre at RIS and the Confederation of Indian Industries for organising this programme.

2. The Association of Southeast Asian Nations (ASEAN) has been the most successful regional organization in Asia and the Pacific. As the geographically adjacent, western neighbour of ASEAN, India’s relations with ASEAN have grown from strength to strength. India’s partnership with ASEAN has successfully moved from a Sectoral Dialogue Partnership in 1992 to a Summit Partnership in 2002 and to a Strategic Partnership in 2012.

3. On the economic front, India and ASEAN signed a Free Trade Agreement in Goods 2009 and in Services and Investment in 2014, to establish a free trade area. Besides, India is also part of negotiations on the Regional Comprehensive Economic Partnership Agreement (RCEP), which includes ASEAN and its six FTA partners.

4. The growth pole of Asia is shifting. India has moved into a proactive Act East Policy, which envisages accelerated engagement between ASEAN and India. The relationship is set to deepen in the days to come as the two sides step up their collaboration across a range of economic and strategic issues, including trade & investment, connectivity, energy, culture, people-to-people contacts, and maritime security. Regional cooperation is key to promoting economic stability, competitiveness, growth and integration in the region. A stronger ASEAN–India partnership would also enhance our participation in global economic governance and work towards building a common position, voice and visibility in addressing global governance issues.

5. The ASEAN–India Development and Cooperation Report 2015 (AIDCR) is built upon an independent study commissioned by the ASEAN–India Centre to explore further scope and opportunities in deepening the ASEAN–India Strategic Partnership. One of the objectives of the Report is to bring together ideas, perspectives and experiences as part of our efforts to promote ASEAN–India integration in the context of the ASEAN Economic Community, which will take shape by the end of this year. The Report presents comprehensive regional cooperation and integration issues, going beyond ASEAN and India to include relations with the East Asia Summit as well.

6. During the last two decades and a half, India’s efforts in improving relations with Southeast and East Asian countries have resulted in increased trade and investment, better provision of trade facilitation measures, more engagement in non-traditional areas including security, and a perceptible reduction in the connectivity gap. However, there is still vast untapped potential.

7. Moving from cooperation to integration would require jointly addressing challenges to strengthen the partnership between ASEAN and India across the board. Understanding the core challenges in moving towards deeper integration requires better understanding of the underlying dimensions: enhancing macroeconomic and financial stability, trade integration and investment promotion, higher competitiveness and innovation, connectivity improvement, sharing resources and knowledge, supporting equitable growth and strengthening regional institutions, among others.

8. The ASEAN region has remained attractive as a destination for foreign investment. The growing trade and investment relations between ASEAN and India justify further areas for economic collaboration. Singapore being the largest investment contributor to India from ASEAN and having core competences in areas such as air and sea transport, innovation, technology, etc., points us in the direction of certain possible areas of collaboration. Malaysia and Thailand are sound in logistics performance and could enhance the scope for further tie-ups. The growing middle class in the region, alongside more active Governmental policy measures, encourages scope for bilateral investment.

9. We are, therefore, quite optimistic that mutual investment opportunities arising from the realisation of the ASEAN Economic Community and India’s initiatives such as ‘Make in India’, ‘Digital India’, Smart Cities’, etc., coupled with the entry into force of the ASEAN-India Trade-in-Services and the ASEAN-India Investment Agreements from 1 July this year, would open up further avenues to channelize more investments both ways. This, in turn, would help in augmenting bilateral trade in goods and services as well.

10. India is partnering ASEAN, China, Japan, Republic of Korea, Australia and New Zealand in the ongoing negotiations on the Regional Comprehensive Economic Partnership (RCEP). Given the agreement on the Trans Pacific Partnership, both ASEAN and India will have to accelerate the pace of their economic reform processes in order to effectively participate in and benefit from the trade creation possibilities under RCEP.

11. At the same time, to socialise the benefits of the FTAs among the user business communities, we have to encourage more and more business fairs, conclaves, seminars and symposia, and support and strengthen interaction between the private sectors of India and ASEAN member countries. More interactions would be needed between policy think-tanks, industry associations and academia of both sides.

12. It is not tariff liberalization but the disciplining of non-tariff measures (NTMs) which is important for achieving preferential market access. Only then can any FTA achieve its true goal of promoting trade and investment. Some interesting facts about the role of NTMs which have come to light from this study is that although the ASEAN-India Free Trade Agreement has resulted in considerable tariff reduction, at the same time, it is equally important to come to an understanding on the issue of NTMs, which have the possibility of totally denying market access.

13. There is also need for research and policy focus on ways and means for advancing India’s participation and integration in regional production networks and value chains. Policy measures in the direction of developing manufacturing sector competitiveness, supplemented with further liberalization of the trade and investment climate, and developing necessary infrastructure and trade logistics, need to be formulated.

14. Two factors that have a significant bearing on trade and investment are connectivity and access to infrastructure finance. Connectivity in all its dimensions is indeed receiving the highest priority in the ASEAN-India cooperation agenda. We are working on facility for project financing and quick implementation of connectivity projects with ASEAN, whereby industry could receive government support for investments in physical and digital connectivity projects with the ASEAN region.

15. This initiative is expected to provide a further fillip to trade and investment as well as to help integrate our producers and manufacturers in regional value chains. Our Ministry of Commerce and Industry is also working on a Project Development Fund to nurture businesses in CLMV countries, with a view to expanding our trade and investment relations.

16. Work on both the India-Myanmar-Thailand Trilateral Highway and the Kaladan Multimodal Transit Transport project is progressing apace. We have just concluded negotiations on a Trilateral Motor Vehicles Agreement, and are also negotiating a Maritime Transport Cooperation Agreement with ASEAN in order to strengthen maritime connectivity.

17. India and Southeast Asia share rich and deep cultural linkages, which are reflected in our art and architecture, cuisine, dance and music, social mores and value systems, and indeed in many facets of our daily lives. Culture is an enduring and valued bond between the people of India and South East Asia.

18. Tourism is an important area in our interaction with ASEAN. So far, tourism has been moving more in one direction — Indians going to Southeast Asia. Imaginative packages need to be evolved and sufficient incentives offered to attract tourists from countries in Southeast Asia, and from Myanmar, Malaysia, Indonesia, Thailand and Vietnam in particular, by promoting cultural and religious tourism. This will not only bring revenues to India but will also cement civil society interactions, which are an important component of mature and enduring state-to-state relations.

19. ASEAN-India relations have a strong foundation to their partnership, across the three pillars of political, economic and socio-cultural cooperation. We have endorsed the ASEAN-India Plan of Action for cooperation for the next five years, i.e. from 2016-2020, which is closely aligned with the post-2015 vision of ASEAN. We would see formal adoption of the Plan of Action at the 13th ASEAN-India Summit in November 2015.

20. We are two years away from another historic milestone in our relationship. We will be celebrating 25 years of ASEAN-India Dialogue Relations and 15 years of Summit level interaction in 2017. It would be of immense interest to us to hear from all of you, creative suggestions on how we can commemorate this landmark in a befitting manner.

21. Today’s Roundtable will discuss the agenda for India’s engagement with ASEAN post-2015 and draw fresh perspectives on the opportunities and challenges as well as provide recommendations. We look forward to hearing your views with interest.

22. I would like to once again thank the ASEAN-India Centre (AIC) for bringing out the 'ASEAN India Development and Cooperation Report', which would not only be an important resource material but also provide key policy inputs to strengthen the ASEAN-India Strategic Partnership.

Thank you.


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