India became a full dialogue partner at the fifth Asean summit in Bangkok in 1995 and joined the Asean Regional Forum in 1996. India and Asean have been holding summit-level meetings on an annual basis since 2002. Since 2009 this relationship has become one of the most important trade dynamics in the region, China and Japan have been fast to embrace Asean and Asean Free Trade Agreement opportunities but the real business relationship between India and Asean is just beginning.
Although China dominates Asean discussion after the signing of the China-AFTA Free Trade Agreement (CAFTA) that created the third largest Free Trade Zone in the world, India has an existing Free Trade Agreement (FTA) with the ASEAN members signed in Thailand in 2009.ASEAN and India are set to lift import tariffs on more than 80 percent of trade products between 2013 and 2016, delivering huge opportunities for trade development.
Asean is now India’s fourth-largest trading partner after the EU, U.S. and China. In 2008-09 India’s exports to Asean totaled US$ 19.14 billion, an increase of 16.62 per cent. During April-June 2009, India exported goods worth US$ 4.41 billion to Asean.
India imported goods worth US$26.20 billion in 2008-09 from Asean. During the period April-June 2009, India’s imports totaled US$ 6.24 billion.
Breaking these numbers down to a per country level it is clear how important India-ASEAN Trade is set to become. Singapore is the most active investor in India from the Asean region.
Foreign Direct Investment (FDI) inflows from Singapore between April-December 2009 reached US$ 1.70 billion. The total bilateral trade during 2008-09 was US$ 16.1 billion, an increase of 3.86 per cent over US$ 15.5 billion in 2007-08. Thailand - India trade touched US$ 4.64 billion in 2008-09, as compared to US$ 4.11 billion in 2007-08, a growth of 12.9 percent.
Thai investment in India is in telecommunications, hotel and tourism, food processing, trading and chemicals. Thailand is targeting US$ 10 billion bilateral trade in 2010.
Indonesia - During the period 2008-09, India exported goods worth almost US$ 2.55 billion to Indonesia. Total bilateral trade during 2008-09 was US$ 9.22 billion-an increase of 32.08 per cent over the trade figure of US$ 6.98 billion in 2007-08. Malaysia - India trade amounted to US$ 10.5 billion during 2008-09. During this time, US$38.7 million worth of Malaysian investments in India were made primarily in sectors like construction, real estate and business services. India is the ninth-biggest investor in Malaysia.
Myanmar - During 2008-09, India exported goods worth US$ 221.64 million to Myanmar. These items included iron and steel and pharmaceuticals. Bilateral trade stood at US$ 1.15 billion during 2008-09, an increase of 15.70 percent over US$ 994.45 million in 2007-08.
Vietnam - Indian trade grew to US$ 2.14 billion in 2008-09 from US$ 1.78 billion in 2007-08, registering a growth of 20.38 percent.
Trade between India and Philippines was worth US$ 998.54 million in 2008-09 as compared to US$ 824.87 million in 2007- 08, an increase of 21.05 percent.
Cambodia - During 2008-09, bilateral trade between the two countries stood at US$ 49.61 million. India exported goods worth US$ 46.90 million to Cambodia in 2008-09, comprising pharmaceuticals, coffee, tea, spices and cotton.
Companies and governments need to take a strong look at how fast ASEAN-Indian can become a major part of their future business, India will bring to ASEAN an amount of trade and opportunity equal to if not greater than China has delivered to the region.
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