India-ASEAN two-way trade "can easily touch $70 billion by 2012"

India’s free trade agreement with ASEAN has spurred a globalising drive by India Inc, and the region has emerged as a significant destination for India’s outward investment, N Chandra Mohan reported in the Business Standard.

"Considering its nascent stage — this FTA is not fully in place, as only eight of ASEAN’s 10 members have ratified it — the uptrend in bilateral trade is extremely encouraging. Two-way trade volumes can easily touch $70 billion by 2012, up from $50 billion in 2010-11.

"Shedding its earlier ambivalence towards bilaterals like this FTA — thanks to the persisting domestic handicap of inverted duty structures, among other reasons — the more positive development is that India Inc is exhibiting greater self-confidence to engage with the region through foreign direct investments (FDI) since the agreement kicked in.

"ASEAN, in fact, has emerged as a significant destination for India’s outward FDI, amounting to $12 billion, or 27% of overall investments of $43.9 billion, in 2010-11. During the first two months of the current financial year, this regional grouping absorbed 21% of India’s outward investments of $5 billion.

"On a year-on-year basis, India Inc’s investment forays in ASEAN doubled to $1 billion during April-May 2011, from $542 million in April-May 2010," he detailed.

He added trade with ASEAN and bilateral trade with its member countries will receive a furthe rboost with the Indian government's plans to appoint a dedicated ambassador to ASEAN based in Jakarta to further India’s drive to integrate with this booming regional grouping.