Malaysia, which will assume Chairmanship of Asean in 2015, wants India to reduce non-tariff barriers along with scheduled dismantling of tariff barriers to zero.
Aida Safinaz Allias, Minister Counsellor (economic affairs) of High Commission of Malaysia, told BusinessLine that non-tariff barriers were hindrances to free flow of goods, services and capital between the ASEAN and India. “Red tape, old rules and redundant regulations serve as non-tariff barriers”, she said. The official was part of a Malaysia team led by High Commissioner Dato’ Naimul Ashakli Bin Mohammad, which was here to explore trade and investment opportunities.
India-Asean trade currently stands at around $80 billion. In the past decade, it grew at a compound annual growth rate of 23 per cent. The free trade agreement in goods between the 10-nation economic grouping and India is on since 2010. This FTA liberalised tariffs on over 90 per cent of items. It is now being reviewed in terms of removal of tariff and non-tariff barriers, the Malaysian official said.
Another FTA in services and investment, which faced resistance from Thailand, Indonesia and the Philippines over a proposed clause on 51 per cent multi-brand retail FDI, is expected to be signed shortly with a revised capping of 49 per cent.
Malaysia, one of the key members of Asean, signed an MoU last year on customs cooperation with India. A Comprehensive Economic Cooperation agreement between the two countries had come into force on July 11. In 2013, India imported crude oil worth $1.87 million and palm oil worth $1.71 billion from Malaysia. Indian investment in Malaysia stands at around $2 billion.
Big numbersAccording to Sanjay Budhia, Chairman, National Committee on Exports, CII, though Malaysian investment through the FDI route between April 2000 and February this year was $636.07 million, about $6 billion are understood to be through the Mauritius route.
Incidentally, India had signed a revised double taxation avoidance treaty with Malaysia in May 2012. The High Commissioner said his team discussed business and investment opportunities with West Bengal Chief Minister on Friday. However, he declined to give details.