The free trade agreement (FTA) in services and investment, that India and 10 ASEAN countries finalised after intense negotiations Thursday, creates one of the world's biggest free trade areas with a market of around 1.8 billion people and a combined gross domestic product of $2.8 trillion.
The agreement would be signed in August next year during a consultative meeting between ASEAN Economic Ministers and India's commerce and industry minister in Brunei Darussalam.
And once the agreement comes into effect, Indian entrepreneurs would get considerable opportunities in services like telecommunications, radio, television, consultancy, architectural, legal, accounting, education, health and social work, according to a Ficci-Deloitte study.
Trade in services and investment were not included in the FTA in goods India and the ASEAN had signed in 2009 and that took effect early last year, as both sides failed to reach agreement in time over key issues.
India, for instance, had asked ASEAN to open up its service sector further, including steps to cover independent professional services and contractual service suppliers at all levels.
But the grouping wanted certain restrictions on the sector as well as protection and liberalization of investment.
Sources earlier had said the Philippines, a strong player in the global outsourcing, had some issues in liberalising the services sector.
The service sector contributes more than half of the Philippines' economic output. Its BPO industry accounts for about 15 per cent of the global outsourcing market and has been the fastest-growing segment of the country's economy.
However, discussions progressed since the ASEAN Summit in Phnom Penh last month with ASEAN leaders showing stronger commitment to the expanded FTA.
According to Indonesia's director general for international trade cooperation, Iman Pambagyo, the agreement was reached after various points were met by both sides, including India dropping its request for independent professional services and as a trade-off ASEAN dropping its request for prudential measures in financial services.
“ASEAN members and India will also put requirements and limitations of contractual service suppliers in own schedules of commitment [of liberalization],” he said in a statement.
Earlier this week, FICCI had released a paper on India-Asean economic relation in which it said huge opportunities existed in sectors like agriculture, services, manufacturing and chemical.
"Cooperation in the areas of physical, digital, financial and media connectivity throws open various opportunities in India and ASEAN," it said.
Iman also said completion of the FTA on goods and investment would smooth the process for the regional comprehensive economic partnership (RCEP) ASEAN plans to seal with its six partners, including India, as "features in this agreement is similar to other deals with ASEAN FTA partners, such as negative listings for investment and a positive approach for trade in services.”