Making the importance of India’s ‘Look East’ policy apparent, India today said it was working on free trade agreements with China, Japan and South Korea and eventually envisioned the creation of a larger Pan-Asian free trade area that included Australia and New Zealand as well.Speaking at the Asian Development Bank’s annual general meeting today, Prime Minister Manmohan Singh said that after having concluded FTAs with SAARC, Singapore and Thailand, India was ‘‘working on similar arrangements with ASEAN, Japan, China and South Korea’’ as well. He also reiterated that India needed $150 billion for infrastructure development.Describing this move as an important part of India’s Look East Policy, the PM said that such ‘‘web of engagements may herald an eventual free trade area in Asia covering all major Asian economies and possibly extending to Australia and New Zealand’’.According to him, the Asian region was already ‘‘an engine of global growth’’ and that such ‘‘Pan Asian FTAs’’ could be the future of Asia opening ‘‘new growth avenues’’ for our India as well.The Prime Minister sent out a clear signal that India was determined to enlarge the Indo-ASEAN partnership domain to make the 21st Century ‘‘a truly Asian century’’ for which India had ‘‘actively pursued external liberalisation by cutting down customs duty rates’’.Here he said that the current peak rate, at around 12.5 per cent, was close to ASEAN levels and that India had already announced a policy objective of aligning duty rates with ASEAN levels.Learning from the East Asian crisis, the Prime Minister also said that current global imbalances could not be sustained and therefore urged global financial institutions to first play an active role to prevent a sudden global economic downturn and also devise strategies to cope with the trend of rising crude oil prices.He said that ‘‘the current global imbalance is reflected in the huge disparities in the current account positions of different countries’’. He pointed to US’s current account deficit which stood at $805 billion; Japan’s current account surplus at $163.9 billion; China’s and West Asian surpluses at $158.6 billion $196 billion respectively. While some mismatches were to be expected and even desirable but “large disparities raise concerns” about their “unsustainability and provoke the fear of hard landings”.It’s here that he said that there was a need for a coordinated effort to correct the imbalances to prevent a sudden downturn and international financial institutions especially needed ‘‘to play a proactive role in this regard’’.On crude oil prices that have touched $75/barrel and have all oil importing countries worried, he said that it was incumbent on all international financial institutions to ‘‘pool their collective wisdom, expertise and experience to devise credible strategies to enable the world economy to cope with the increased unpredictability and volatility of energy prices and their impact on processes of world economic growth’’.Pointing out that it was impossible to have growth and progress in isolation in a globalised world, the PM said countries and international agencies had to collaborate to produce welfare-enhancing synergies. In that regard, he said that the challenge before Asia was to create and maintain a regional and international environment that was conducive to maintenance of high economic growth on a sustainable basis.
