India, ASEAN told to remove barriers
The Jakarta Post, Mumbai
India and ASEAN member countries could easily multiply trade and investment flows between them in just a few years if they removed trade and investment barriers, experts said.
"We have to find ways of eliminating existing trade barriers," said Tan Sri Dato Ajit Singh, former secretary general of the Association of South East Asian Nations from Malaysia, during the second India-ASEAN business summit recently. Singh is now an adviser to the Federation of Indian Chamber of Commerce and Industry (FICCI) for ASEAN matters.
He pointed out that there were many bottlenecks in trade between the two sides with heavy bureaucracy, high tariff and non-tariff barriers.
"We also need more direct flights, ... easier access to visas, and you (India) must lower your hotel rates," Singh said.
He explained that trade between India and ASEAN had been growing at less than US$1 billion per year during the past the decade, which is far less than the actual potential. "In comparison, the pace of trade between China and ASEAN is 10 times faster."
Indian Prime Minister Atal Behari Vajpayee said in his inaugural speech: "India-ASEAN trade now exceeds US$10 billion, but it has barely scratched the surface of its potential. We must aim high, and target a turnover of $15 billion over the next two years, and $30 billion by 2007."
ASEAN Secretary General Ong Keng Yong acknowledged that India's 1.2 billion population, fast growing middle-class and other economic advantages offered huge potential for ASEAN businesses, but perception among ASEAN businesspeople that it was difficult doing business with Indians must be changed.
"We must try to make people more aware of India... We really need to do more to bring the perception to another level," Ong said.
"We can do more, the potential is there."
India and ASEAN have been trading partners for centuries. The two as regional trade partners offer a huge and attractive, geographically contiguous market of nearly 2 billion people.
Looking at the numbers, there is indeed huge business potential in India, a country now considered as one of the largest emerging market economies in the world with a gross domestic product (GDP) of around $2.9 trillion, according to international consulting firm McKinsey in a report.
"The economy is now on the verge of a sustained increase in domestic demand due to rising per capita GDP and the increasing globalization of India's capital markets. These, coupled with the availability of low-cost, high-quality manpower, offer attractive opportunities for business in India," Mckinsey said, adding that the number of people with a relatively high income level of more than $2,300 per year was projected to jump to 44 million in 2006 from 27 million in 2001.
But Singapore businessman William Chong, who is planning to set up a hospital in India, said that those figures and projections meant nothing if there was not a serious attempt to eliminate trade and investment barriers.
"Issues like licensing, red tape, repatriation (of profit), and (antiquated) labor laws must be immediately addressed," he said.
There has been suggestions from some participants in the business summit that India should set up a Cabinet level committee chaired by the Prime Minister to discuss and resolve the various bottlenecks in doing trade and investment activities in India.