India and ASEAN will sign a free trade agreement (FTA) on services and investment in August in order to achieve a target of $100 billion in trade by 2015 and also as a further step in bringing India into the Regional Comprehensive Economic Partnership (RCEP), which ASEAN sits at the center of.
India already has an FTA with ASEAN on goods, but an agreement on services and investment required additional negotiation. The RCEP will link the ten ASEAN member states with Australia, China, India, Japan, South Korea and New Zealand. Together the 16 nations include more than 3 billion people, have a combined GDP of about $17 trillion, and account for about 40 per cent of world trade.
An essential part of improving trade ties between ASEAN and India is physical connectivity, said Shanmugam, Singapore Foreign Minister.
This means that better land and sea routes need to be developed, which will require significant investments in infrastructure like roads and ports. ”
We look forward to greater cooperation on implementation of the master plan of ASEAN connectivity,” Shanmugam said. “If we can do it with good highways with proper security, it will transform the landscape.”
The minister also urged India to take the further step of negotiating with ASEAN and the RCEP on a full air transportation agreement that would liberalise India’s aviation industry, including cargo and passenger services. Such liberalisation, argued Shanmugam, is the heart of the “Look East” policy articulated by Indian Prime Minister Manmohan Singh, which calls for India to “step up engagement with ASEAN.”