- leading to the creation of a dynamic and sustainable Asian economic and trading community
Singapore, Thursday, 28 January 2010 - With the ASEAN-India Free Trade Agreement (AIFTA) coming into force as of January 1 this year, ASEAN-India trade is expected to jump to US$100 billion from the current US$40 billion within the next five years. With this exciting economic development unfolding as the backdrop, the Singapore Business Federation organised a seminar on the AIFTA today.
The AIFTA is most timely as India has begun to reduce its dependence on Western markets. Through establishing and promoting closer economic links within the Asian regions, India hopes to create a more balanced international trading eco-system where rising domestic and regional consumer demand will help India attain faster and sustainable economic growth. The AIFTA represents a key international building block leading towards the creation of a dynamic and sustainable Asian economic and trading community.
The seminar, which involved presentations from IE Singapore, Singapore Customs and Singapore International Arbitration Centre (SIAC), helped the 78 Singapore corporate participants from the logistics, manufacturing & industrial goods, commodities, automotive, infrastructure, infocom, real estate and services sectors attained an in-depth understanding on how to exploit the AIFTA to suit their specific India-related business needs and interests.
SBF CEO, Mr. Teng remarked,"One reason for ASEAN's relative economic resilience is the region's collective will to keep our markets open. ASEAN member countries recognize that protectionist measures neither aid growth nor sustain economic recovery in the long run. In that regard, the signing in August 2009 of the India-ASEAN Trade in Goods Agreement was a welcome demonstration of our mutual commitment to free trade."
The Indian High Commissioner to Singapore, His Excellency Dr. T.C.A. Raghavan also noted that India's GDP growth in 2010 would be fueled by its fast-growing middle class. Current estimates indicate that the middle class which comprise approximately 25 % of the total population of 1.2 billion,is set to increase in size to 50 % by 2025. "An increase in the quality of life of such a huge segment of the population would not be possible without a corresponding growth of the economy. India's economy, which is expected to grow between 7% - 8 % during the current financial year, is expected to reach the pre-recession growth levels of 9 %+ from 2010 - 2011 onwards," he added.
Background information on the AIFTA
Negotiations on the ASEAN-India started in 2003.
To date, three ASEAN countries - Malaysia, Thailand and Singapore - have implemented phase one of the AIFTA, while a similar agreement on trade-in-services is awaiting approval.
Once the agreement on trade-in-service is approved, companies in ASEAN and India will be able to tap into each other's expertise and opportunities in the information technology, business process out-sourcing, and space sciences sectors.
The US$100 billion trade target within the next five years is reasonable when compared to the current combined GDP of ASEAN and India at US$2 trillion.
This Trade-in-goods agreement will create an opening for more than 4,000 duty-free items from ASEAN member countries to enter India's market of over a billion people. These items make up almost 80 per cent of imports from ASEAN into India. Likewise, Indian enterprises will be able to tap into the rich and diverse natural resources of Southeast Asia and export its products to ASEAN's combined consumer market of 550 million people.
For more information on GBD-SA events, please contact:
Mr. Teo Chi Howe
Senior Executive, South Asia
Singapore Business Federation
Email: markets.sa@sbf.org.sg
Tel: 6827 6855
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