India, ASEAN told to remove barriers

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.