India’s desire to strengthen trade ties with its Asian neighbours may bear fruit as investment channels open up, but some legal and cultural hurdles need to be cleared. Vandana Chatlani reports
Speaking in November 2014 at the East Asia Summit in Myanmar, India’s prime minister Narendra Modi said: “My government has moved with a great sense of priority and speed to turn our ‘Look East Policy’ into [an] ‘Act East Policy’.” His words signalled renewed interest in increasing India’s economic and political ties with its Asian neighbours.
Nowhere is this more apparent than in India’s aggressive push for greater cooperation with the Association of Southeast Asian Nations (ASEAN) bloc. In February, India announced that it would extend a US$1 billion line of credit to promote projects that support physical and digital connectivity between India and ASEAN. “Along with the construction of the India-Myanmar-Thailand Trilateral Highway and the Kaladan Multimodal Project, we are also at the final stages of a Motor Vehicles Agreement between India, Myanmar and Thailand which will address soft connectivity issues,” said Anil Wadhwa, secretary (East) for the Ministry of External Affairs (MEA), at Delhi Dialogue VIII, a forum to discuss political, economic and socio-cultural issues between ASEAN and India.
ASEAN-India agreements on trade in services and investment came into force on 1 July 2015, building on the free trade agreement signed in 2010. The new agreements will ease restrictions on the movement of professionals in a range of service industries and open new investment opportunities.