TODAY -

India-ASEAN FTA: Implications for India's NorthEast
- Part 1 -

By James R. Ruolngul *

Abstract

Expectations run high after the successful conclusion of the India-ASEAN FTA negotiations that had been dragging on for years. Considering the total population of India and the ASEAN countries, the volume of trade between them, the enormity of their GDP and the imagined potentialities, this FTA could certainly be a major agreement between two emerging Asian economic powerhouses.

But what happens to the long-neglected India's Northeastern states in the wake of such an important agreement? What are the prerequisites needed to accentuate this important FTA in relation to these Indian states? Will this region benefit much from it since it shared a 1643 km long border with Myanmar?

Or will it be yet another hyperbole judging by the past agreements, plans and proposals for development, progress, trade and investments that had conveniently eluded these states? This paper investigates the AIFTA and the circumstances related to its conclusion and delve into the implications it could have on the north eastern states of India.

The paper surmises that unless the whole economic, political and security structure and the whole network of transport and communication facilities are rethought, revamped and redeveloped, this FTA will become just another statistics for the people of India's Northeast.


Introduction

India and the Association of Southeast Asian Nations (ASEAN)[i] have concluded negotiations for a Free Trade Agreement (FTA) after years of difficult negotiations. This agreement will be signed into a treaty at the India-ASEAN Summit to be held in Bangkok on December 2008 and will come into force from January 1, 2009 if everything goes as planned.

Expectations from the India-ASEAN FTA are high. The Joint Media Statement of the Sixth ASEAN Economic Ministers (AEM)-India Consultations stated that "the AIFTA could be a major avenue in harnessing the region's vast economic potentials towards sustained progress and improved welfare not only for ASEAN and India but for the greater East Asian region as well."[ii]

The India-ASEAN FTA is the result of many international and domestic factors. On one hand, the trend of international regionalisation and the proliferation of FTAs and the failure of the Doha round of multilateral talks to yield concrete results led both India and the ASEAN countries to consider alternative solutions towards freer trade. On the other, the adoption of policies by India and ASEAN to develop better cooperation with their immediate neighbours in recent years has helped accelerate this negotiation.

In this context, India's Northeast came to be seen in a new light. Several steps have been taken to improve relations with India's immediate neighbour Myanmar. India has also trade relations with Thailand and Singapore. India and Myanmar shared a 1643 km long border. Myanmar being a member of ASEAN, the north eastern states of India become an important link between the two parties.

This paper is an attempt to analyse what forebode India and its Northeast states in the light of the much-hyped India-ASEAN FTA. It will start by looking into the relationship between India and ASEAN and culminate with the present agreement.

After that, the paper will analyse the implications the AIFTA can have on the north eastern states of India. It will, however, not delve into the security-insurgency dimension that has almost become an anthem for most writers on north eastern India except in giving some passing remarks.

It will, instead, try to highlight the many projects, plans and proposals that has been undertaken in the north east during the past few years and explore possible opportunities, problems and solutions for this region and for the FTA.

To be continued ...




* James R. Ruolngul writes to e-pao.net for the first time. The writer can be contacted at jruolngul(at)gmail(dot)com . This was webcasted on September 24, 2007.

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