Diplomatist Magazine Diplomatist April 2018 - Page 11

COVER STORY During the 12th SAARC Summit at Islamabad, the historic agreement, SAFTA, was signed by all the SAARC members on 4 January 2004. SAFTA came into force on 1 January 2006, superseding South Asian Preferential Trade Arrangement (SAPTA). The bilateral investment flows have been sound with ASEAN accounting for 12.5 percent of the investment flows in India since 2000. According to the Department of Economic Affairs, the FDI outfl ow from India to ASEAN nations stood at about $38.672 billion (April 2007- March 2015) while the FDI infl ows from ASEAN nations to India was of approximately $49.40 billion (April 2000-May 2016). Despite these trade and investment statistics, the overall picture is bleak as there have been no signifi cant benefi ts for India from this agreement. With lowered tariff and other trade restrictions, the domestic players faced stiff competition due to cheap goods produced by ASEAN nations, especially rubber imports from Malaysia, coconuts from Sri Lanka and palm oil imports from Indonesia which has hindered indigenous cultivation. In the case of ASEAN, early harvest is required for the remaining 95 percent of apparel lines for duty-free access to Indian apparel exports. Another key dilemma of India-ASEAN FTA has been the growing trade imbalance in favour of the ASEAN. India's exports to ASEAN nations initially grew from $18.1 billion in 2009-10 to $33.1 billion in 2013-2014 but slumped down to $25.1 billion in 2015-2016. Similarly, Indian imports from ASEAN nations surged from $25.7 billion in 2009-2010 to $44.7 billion in 2014-2015, however in 2015-2016, the imports fell to $39.9 billion. In the past six years, the overall share of India-ASEAN trade crawled from 9.4 percent to 10.1 percent, signifying a less than 1 percent growth. Moreover, the share of ASEAN trade defi cit with India grew from 7 percent to 12.3 percent over the six years. This clearly indicates that while the share of India's trade with ASEAN nations has grown marginally, the share of trade defi cit has surged disproportionately. India's expanding trade defi cit with the region has hurt the country's overall current account defi cit. South Asian Free Tr a d e A g r e e m e n t (SAFTA): During the 12th SAARC Summit at Islamabad, the historic agreement, SAFTA, was signed by all the SAARC members on 4 January 2004. SAFTA came into force o V'#b7WW'6VFr6WF6&VfW&VFG&FR'&vVV@4DVFW"FRw&VVVBF7FB7&&R6FVv&6VB2V7BFWfVVB6G&7Fp7FFW2D52B&vFW6&WFBW0V7BFWfVVB6G&7Fr7FFW2D52V7W&W0f"V6֖26W&FBFVw&FbV6֖W06VFR&Vfb&'&W'2FG&4$2fW7FVB&6Fb7W7F26766F2G&6Bf6ƗFW2f Vn6VBG&4$2G&FRB6ƞ6Fb&6VGW&W0f"'W6W72f627W7F2&6VGW&W2'BƖ6V6r7W&6RB6WFF'VW26vVB7BuD66&BFR4eD2FW6vVBF&P6F&RvFuD&f62G2f&2B6FVG2खfWrbFRFffW&VB'VFvWBW&G2bFRV&W"7FFW2FRV&W'2FV6FVBF6''WB6VBƖ&W&Ɨ6Fg&УVǒ#b7FVBbV'#bWg&VwW7@#bvFFR6FFFBG&FRƖ&W&Ɨ6F&6W72f FR'7BGvV'2vVB&R6WFVB'FV6V&W"#rखfWrb6WGbvVƗF6&VF2FR4$0&VvB6WFrGW&Rb&W6W&6W2BvG2G&FVB4eD&Fǒ6WfVBG2FVFWG&&F'BVFVF'FF7B( "fb( "77VRB( "&#F( "