More importantly, China which was enjoying an enviable position in the group and mainly its current chairman Myanmar is no more the lone darling in the region.
The equation is changing as China’s economy slows and growth buckles under debt while India reappraises its relationship with ASEAN amid the prospect that overland routes from Southeast Asia through Myanmar that passes through North East which will also improve east-west trade potential.
ASEAN business ties extending west into India have never enjoyed the same cachet as trade with China to the north. That’s partly because access to India was blocked by Myanmar’s isolation and partly because a two-decade economic boom in China soaked-up as much capital as ASEAN investors could spare.
This optimism was underpinned this week with the release of a report from Standard Chartered forecasting that Indian exports into ASEAN would rise dramatically over the next 10 years to $280 billion a year, up from $33.13 billion in the 2013/14 financial year. Two-way trade is currently locked in at around $80 billion a year.
The report saw Indian export potential in six areas: petroleum products, organic chemicals, vehicles (including auto parts), pharmaceuticals, gems and jewellery, and apparel and clothing accessories.
The first three are categories where ASEAN already accounts for a sizeable chunk of total Indian exports, and where export growth is high. The last three are areas where we feel there is potential for India to increase export growth rates, the report said.
The creation of the ASEAN Economic Community (AEC) by the end of 2015 will also dramatically reshape the economic landscape.
The 10 members of ASEAN will emerge as a single market and production base with combined gross domestic product values of $2.3 trillion. That compares with India’s GDP of $1.8 trillion and China’s $8.3 trillion.
India, with its Look East policy, and ASEAN have already implemented free trade agreements in goods, while negotiations have concluded for an FTA on services and investments. The Standard Chartered report envisaged that improved transport links via road and river would help drive trade.
India also wants to see an acceleration of major infrastructure projects, desperately needed to ensure integration with the wider region, and in particular an Indian trade push into Myanmar, its sole overland gateway into Southeast Asia. After the meeting, the joint statement had all the praise for India even though its Finance Minister could not make it to the finale.
Pivotal in the four day meeting are talks on the Regional Comprehensive Economic Partnership (RCEP) – essentially an FTA among the 10 ASEAN members – and the elimination of non-tariff barriers that will herald a new deal within the trading bloc. Meanwhile, different sources also indicate that ASEAN nations even Myanmar are viewing China with suspicion.
Source: The Shillong Times
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