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Right time to Look East, says FICCI president

New Delhi 2015: The Federation of Indian Chambers of Commerce and Industry (FICCI) today applauded the formal coming into force of the Asean Economic Community (AEC).

Commenting on the development, FICCI president Harshavardhan Neotia said: “Most of the basic agreements are already in place and today is more of a symbolic date. The AEC will continue to evolve for the next ten years as addressing the long term aspects of integration including economic, political and social challenges will take time as also acknowledged in the AEC Blueprint 2025. FICCI looks forward to working with Government of India, ASEAN Secretariat and the individual governments to enhance the connect with India. The ASEAN India Business Council, for which FICCI provides the Secretariat takes on great relevance to the mission”

The Secretary General of ASEAN who interacted with FICCI CEOs during his visit to India earlier this month had invited Indian industry to consider ASEAN actively as the AEC has direct relevance to India.

Internal tariffs within ASEAN have been addressed with 96 percent of all goods at zero tariff duty. A self-certification system for exporters, and other measures for business facilitation like the setting up of the ASEAN Single Window (ASW) which will be operational by 2016 and will be harmonised with national single windows are some key attractions for Indian industry.

The 80 percent tariff-free ASEAN-India trade in goods agreement which will be possibly enhanced through further negotiations will add to the attraction. Textiles, electronics and pharmaceuticals are strong success stories for India and can be substantial areas of investment for Indian companies, given the sizeable market from the burgeoning middle class in ASEAN. India’s support for a Project Development Fund to develop manufacturing hubs in Cambodia, Lao PDR, Myanmar and Vietnam would strengthen the supply chain development between the two regions.

Dr. A. Didar Singh, Secretary General, FICCI added: “An integrated ASEAN will become an excellent take-off point for international markets and tapping into global value chains. ASEAN is price-competitive as a source of inputs. Since barriers to trade are coming down, comparative opportunity will guide investments into ASEAN.”

The Asean Economic Community, a single market and production base with free flow of goods, services, investment and skilled labor across borders, officially starts today as provided for under the 2015 Kuala Lumpur Declaration.

AEC has a combined market of 600 million with high ratio of youth. As a bloc, it will also have the third highest population after China and India; a GDP of USD 2 trillion across 10 countries and average GDP (gross domestic product) per capita of USD 3,578. The Asian Development Bank and the International Labour Organization predicted that within the next 10 years, AEC would generate 14 million additional jobs. (ANI)