After nine years of negotiation, India settles for less services with Asean
India had initially sought a more liberal visa regime in areas like education, health, nursing, IT, architecture and chartered accountancy.
Officials said Delhi is likely to settle for much narrower market openings for its professionals than what it had initially demanded.
On Monday, Prime Minister Manmohan Singh told Sultan Hassanal Bolkiah of Brunei that India is keen to further its relations with Asean and that "the best is yet to come" in the country's relations with the 10-nation regional grouping. Singh is in the Cambodian capital Phnom Penh where the ruler of Brunei will take over the chair of Asean for 2013.
"We have realised that there is no use hoping that Asean would give us a better deal in services, especially for professionals, than what they have given to New Zealand and Australia. We are ready to settle for less," a commerce department official told ET.
India had initially sought a more liberal visa regime for its professionals in areas like education, health, nursing, information technology, architecture and chartered accountancy compared to what Asean has offered to New Zealand and Australia in its FTA with the two countries.
However, India's top priority after 14 rounds of negotiations is to get the deal sealed.
"Not only are we not hopeful of getting more than what Australia and New Zealand got, it now seems that for certain category of services with some of the Asean countries we may even have to agree to lower levels of openings," the commerce department official quoted earlier said.
Asean includes Cambodia, Brunei, Myanmar, Malaysia, the Philippines, Thailand, Singapore, Vietnam, Laos and Indonesia. The commerce department has already got the nod for lowering its ambitions from the Prime Minister's trade and economic relations committee, the body that gives the negotiating mandate for all FTA talks.
The main reason why Asean is playing hardball is no secret. Since it managed to convince India to implement the FTA in goods in January 2010 independent of the agreement on services and investments, the 10 member-states do not have any incentive to conclude the latter.
"India is much more competitive than Asean in most services and it is no surprise that the deal is getting delayed," said a trade expert from a Delhi-based think-tank. "When India agreed to sign the FTA in goods first, it voluntarily sealed the fate of the services deal."
In fact, Indonesia and the Philippines have told India that they would not improve their services offers beyond what they have committed at the WTO and were ready to get lower openings from India in turn. There is little that India can do about it.
Even in the area of investments, the two sides are expected to sign nothing more than an investment promotion deal as Asean is not ready to agree on India's suggestions to ensure that an investment pact does not get misused.
Delhi is now banking on diplomatic pressure to get the services and investment deal through, although it would be a much watered-down version. Prime Minister Manmohan Singh is expected to do exactly that at the Asean Summit in Cambodia early next week.
"We hope we are successful in applying diplomatic pressure and getting Asean to conclude the services talks and sign the agreement," the official added.