India has given a go-ahead to services and investment deal with 10-member Asean as part of Comprehensive Economic Cooperation Agreement (CECA). The Union cabinet cleared the proposal on Thursday, overruling concerns of the finance ministry, the official said.
A decision on the deal was deferred when it was taken up last on November 28 meeting of the Cabinet after finance minister P Chidambaram expressed concerns on the investment text of the agreement, saying it was finalised without any consultation with his ministry. India signed an FTA in goods with Asean in 2009. New Delhi has been keen on a deal in services where it feels the country has more to gain.
India’s exports to Asean declined by 10.2% in 2012-13 to $32 billion, whereas imports grew by 2.9%, to $43.7 billion, leaving a trade gap of about $11 billion. Lower tariffs in Asean offer local manufacturers significant tariff advantage over Indian producers, an issue that has been time and again raised by all industry bodies. The finance ministry had also highlighted that the Asean agreement was not in sync with the latest model text for such pacts prepared after in-depth deliberations.
The government is tightening its bilateral investment pacts with other nations after as many as 17 companies or individuals including Deutsche Telekom, Germany, Vodafone International Holdings, Sistema of Russia, Children`s Investment Fund and TCI Cyprus Holdings have served notice to India under various BIPAs after their investments ran into trouble or they faced adverse policy action.
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