'3 paths' to boost Asean-India economic links

Mr Narendra Modi said he was pleased Asean-India trade had grown in 2014-2015
Mr Narendra Modi said he was pleased Asean-India trade had grown in 2014-2015.

Asean and India stand out as two bright spots at a time when the global economy is weakening and entering uncertain times.

But both sides must work harder to promote their economic links if they are to remain beacons of growth, Prime Minister Lee Hsien Loong said at the Asean-India Summit yesterday.

He spelt out three paths that will work to help achieve this.

The first is the Asean-India Free Trade Area, where Mr Lee said that a review of one part of the agreement and a ratification of two others by India and the 10 Asean members will be mutually beneficial.

The completion of a separate Regional Comprehensive Economic Partnership (RCEP) - a proposed FTA involving Asean members and six other countries, including India - will also deepen India's engagement in Asean and maintain its important role here, he added.

"We have just concluded the Trans-Pacific Partnership and that makes it even more critical that we conclude the RCEP quickly to complete the architecture of trade liberalisation in the Asia-Pacific," he said, in reference to the TPP, another regional trade pact that encompasses 12 Pacific Rim countries, including the United States.

The third area is in connectivity. Mr Lee said land and maritime links are being strengthened, but air connectivity still lags behind.

Both sides should move quicker on negotiations to complete the Asean-India Air Transport Agreement as this will potentially unlock more flight routes to carriers wishing to fly between Asean countries and Indian cities.

Mr Lee repeated this call to boost regional air transport links during the Asean-Plus-Three Summit with China, Japan and South Korea, saying it was a way to foster greater people-to-people ties.

At their meeting, Indian Prime Minister Narendra Modi told his Asean counterparts he was pleased that trade between Asean and India had grown to US$76.5 billion (S$108 billion) for the 2014-2015 period, after a slight decline the year before. Asean remains India's largest investor and investment destination, he added.

Mr Modi said India intends to commit a line of credit of US$1 billion to support projects boosting physical and digital connectivity, as well as a separate Project Development Fund to expand the number of capacity-building projects it has with newer Asean members Cambodia, Laos, Myanmar and Vietnam.

He also underlined India's commitment to Asean's lead role in determining the region's future. "As our rapidly transforming region navigates its way through uncertain times to a peaceful and prosperous future, we look forward to Asean leading the way in defining the regional architecture," he said.

Lim Yan Liang

A version of this article appeared in the print edition of The Sunday Times on November 22, 2015, with the headline ''3 paths' to boost Asean-India economic links'. Print Edition | Subscribe