India Continues Its Endeavour
First Published: August 18, 2009 ADawnJournal.com
As India continues its endeavour to become one of the world’s global economic superpowers, the latest piece of good news for the country’s economists came this week when the country agreed a free trade pact with the ASEAN complex, a powerful negotiating bloc made up of ten South East Asian countries. This pact is expected to greatly strengthen India’s external trade muscle at a time when it has the eyes of the financial world upon it. Much of the talk in financial forums over the past couple of years has related to the BRIC nations – Brazil, Russia, India and China. These four countries are seen as being greatly influential to the future economic path which the world will take.
The ASEAN countries – Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand and Vietnam – account for much of South Asia’s wealth outside of China, Japan and North and South Korea and as partners wield a considerable amount of influence and purchasing power. By coming to an agreement with this trading bloc India has guaranteed itself the opportunity to trade with the countries without the imposition of tariffs – a major reason why many countries can struggle to make the economic impact they would wish to. With a list of natural resources that makes India a potentially very desirable trading partner, getting such agreements in place is hugely beneficial going forward.
Economic strength is something that gets built over time and needs to be accumulated in the face of challenges. As such India will take some time to be up there at the top of the world’s nations by GDP, but such a time is considered to be highly likely if not certain by the world’s top economists. This is why the nations involved in ASEAN see it as important to be involved with India. A country which brings in a lot of money through international trade will be in a position to spend a lot, too. Being geographically relatively close, India and the ASEAN countries will no doubt find a lot of opportunities for trade. The other economies in the area are considered to be too strong (China, Japan and South Korea) for working as a bloc to be worth their time, or too insular (North Korea) to even consider it.
India itself is geographically in an interesting position. Its closest neighbour, Pakistan, is not one of its allies due to the history between the countries. Therefore India is likely to continue to look further afield in order to satisfy its trading potential. Also in the pipeline is a national space program which will require no small amount of materials from outside the borders of India. In this respect it will be interesting to see what shape the trading between India and ASEAN (and its other trading partners) will take in the years to come. There has never been a better time to look for a trade agreement with India, and this should be borne out when we start seeing concrete figures.