Remarks by HE Mr Ton Sinh Thanh
at the 5thIndia – ASEAN Economic Forum
New Delhi, 08July, 2016
Shri Gen. (Dr.) V.K Singh, MoS, MEA
Ms Preeti Saran, Secretary (East), MEA
Ambassador Shyam Saran, Chairman, Research and Information System for Developing Countries (RIS)
Shri Sunil Kanoria, President, ASSOCHAM
Distinguished guests
Ladies and gentlemen
It’s my pleasure and privilege to speak at the 5thIndia – ASEAN Economic Forum. This is a significant and timely event aswe are looking forward to celebrating the 25th anniversary of India – ASEAN dialogue partnership and 15 years of summit level interactionby next year 2017.
Let me take this opportunity to thank ASSOCHAM for hosting this event and giving me achance to share my thoughts on what we have done,particularly in terms of economic engagements, and the way forward to provide further momentum and substances to India – ASEAN strategic partnership.
It can be said that India and ASEAN have already found synergies in our efforts towardsstronger strategic and economic linkages. Since Indian’s‘Look East’ policy was launched in 1991, within over two decades, ASEAN-India relations have grown rapidly from a sectoral dialogue partnership to a full dialogue partnership, a summit partnership in 2002 and a strategic partnership in 2012. In its long-term search for enhancing economic and strategic space in the Asia – Pacific region, India has reached out to improve ties with ASEAN as a cornerstone of its Look East and Act East policy. In return, most of ASEAN member states always view India as a highly trusted and potential partner in the region. We have developed our partnership on the basis of shared views on many regional and global issues, together with long-standing linkages across the three pillars of political, economic and socio-cultural engagements (recently more focus on connectivity).
It should be noted that, in this context, India-ASEAN trade and investment relations have been growing steadily over the last 25 years. The ASEAN-India Agreements on Trade in Services and Investment came into force since 1 July 2015, marking the completion of the ASEAN-India Free Trade Area. ASEAN now is India's fourth largest trading partner, with two-way trade volume at approximately US$ 76.53 billion in 2014-15. Investment flows are also substantial both ways, with ASEAN accounting for approximately 12.5% of investment inflows into India since 2000.
Ladies and gentlemen,
There remain a lot of potentials for the ASEAN-India economic partnership,given many defining developments in both India and ASEAN. Against the backdrop of global economic uncertainties,India is emerging as the fastest growing major economy and the most attractive FDI destination, with a GDP growth rate of 7.6% in 2015-16 boosted by many reform initiatives including ‘Make in India’ and liberalizing FDI policies. More opportunities are opening up since India is now coming to a new level of development which requires speeding up economic reforms to enhance your national competitiveness while integrating further into regional and global economy.
At the same time, ASEAN is forging withASEAN Economic Community (AEC)’s cominginto reality on 31stDecember, 2015, making it the fourth largest economy in the world, with a huge and largely middle income market of 622 million people and a combined GDP of 2.5 trillion USD. The AEC will transform ASEAN into a region with free movement of goods, services, investment, skilled labour and capital. This is particularly promising for CLMV nations (Cambodia, Laos, Myanmar and Vietnam) to unlock potential and reduce our development gaps with the remaining ASEAN members.
As two of the fastest growing economies in the world now with a combined GDP of approximately over 4 trillion USD and a total population of over 1.8 billion, ASEAN and India together become increasingly important economic partners and engines for global economic growth. The conclusion of the ASEAN-India Free Trade Area is a defining factor of ASEAN-India economic relations. It can not only reduce India’s trade deficit in goods but also facilitate freer trade in services and investments from India to ASEAN countries. Moreover,India and ASEAN member states are now actively engaging in the Regional Comprehensive Economic Partnership (RCEP) negotiations to build more synergies in the new key regional trading system accounting for nearly 45% of world trade.Enhancing India-ASEAN trade is a priority area under the new Plan of Action to implement the ASEAN-India partnership for peace, progress and shared prosperity 2016-20.
Ladies and gentlemen,
The opportunities and challenges are intertwined in the economic partnership between ASEAN and India. Looking at the data, we noted that the annual trade between our ASEAN and India registered an average growth of 22% per annum in the decade up to 2011-12 but this has stagnated thereafter. The reasons can be limited regional connectivity, some gaps in regional trading architecture, production networks, financial cooperation and other regional integration issues.
What is the way forward? Since there have been quite many high-level commitments, frameworks and action plans for our cooperation and even many specific proposals have been initiated by both sides (and more by India), what may be required now is more substantial engagements on the ground with more active participation of all actors, especially the private sectors both in India and ASEAN member states. We propose that India’s private sector to more actively participate in regional value chains to utilize their own competitive advantages in a certain sectors, including electronics, gems and jewellery, automobiles, pharmaceuticals, cotton and textile, IT services,..
Engaging with regional/global trade and investment regimes, including RCEP with higher commitments may be more challenging for India and some ASEAN countries including Vietnam, but in the long-term, this engaging process will not only help diversify our markets but also strengthen our economies by raising our standards and competitiveness regionally and globally.
Ladies and gentlemen,
Vietnam,in the capacity of Coordinator for ASEAN-India dialogue for the period of 2015-18, would engage more activelyto facilitate closer partnership between India and ASEAN, particularly CLMV countries. We will work harder to promote deeper integration of both India and ASEAN into regional cooperation mechanisms, includingFTAs implementation reviews and RCEP negotiations. We would appreciate and support the Indian government’s offer of a Line of Credit of 1 billion USD to promote physical and digital connectivity projects between India and ASEAN and the Project Development Fund worth of 500 crore INR to support Indian investments in CLMV countries, particularly in textile and garments sector.
To conclude, I strongly believe that many opportunities and achievements are arising from India – ASEAN deeper economic engagements and integration into regional and global economy.I wish this event a great success and look forward to more proposals and actions to promotethe strategic partnership between ASEAN and India.
Thank you very much!
1