What can be the implications of the India-ASEAN FTA in services and investment for the Indian economy? Discuss while keeping Chinese response to growing Indian presence in the ASEAN.

The India-ASEAN FTA is a free trade area among India and the member countries of ASEAN (Association of Southeast Asian Nations) with an aim of expansion of the economy. It was signed in 2003 in Bali, Indonesia, and came into effect in 2010.

Background: The agreement is based on the mutual interest of expanding the economic ties in the Asia-Pacific region. The look east policy of India created the same kind of possibilities.

Implications:

• After the signing of the FTA between India and the ASEAN, the bilateral trade has increased.
• It is going to experience tariff liberalization of over 90 percent of products exchanged.
• Signing the FTA on services and investment will maximize trade and economic engagement in the future.

Chinese response: Both India and China are associated with ASEAN. The main bone of contention is on the matter of rights on regional politics. India’s presence in South-East Asia is not a matter of easy to digest for China. They are continuously monitoring the activities. If India tends to make a strong bonding economically, Other countries will neglect China’s influence.

India’s stance: India is now looking forward to cooperating in the areas of engineering, agriculture, science, and ICT. It will strengthen cooperation in the areas of blue economy and maritime security.