India-Malaysia economic pact likely by September

India and Malaysia today said the Comprehensive Economic Cooperation Agreement (CECA) between the two countries will be ready by September...

India and Malaysia today said the Comprehensive Economic Cooperation Agreement (CECA) between the two countries will be ready by September,in time for Prime Minister Manmohan Singhs visit in November. Minister of Commerce and Industry Anand Sharma declared that the two sides are bullish in their optimism of beating their $50 billion trade target before the 2015 projection.

Sharma and Malaysian Prime Minister Mohd Najib Tun Razak sat for a bilateral meeting and discussed the CECA,which was preceded by a dialogue with Malaysian Minister of International Trade and Industry Mustapa Mohamed on similar issues. The two cited their shared interest of increasing the avenues for bilateral trade,investments and services in energy,information technology,pharmaceuticals,infrastructure,automation and biotechnologies. ”Yes,we will achieve our target,the world lives on hope and we are very much focused on our target for doubling our share by 2015,” Sharma said. Bilateral trade fell under $10 billion last year caused by fiscal contractions,but so far this year we are enjoying robust growth.

Highlighting cooperation between the two countries was the corporate cooperation between GMR Group,comprising the Airports Authority of India and Malaysia Airports Holdings Bhd which led to the construction of Terminal 4 and Indira Gandhi International Airport in New Delhi. The terminal was inaugurated by Singh on Saturday,July 3.

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While India and the south-east Asian trade block ASEAN,which includes Malaysia,have entered into a trade agreement,challenges have yet to be overcome in negotiating a services agreement. Similarly,the CECA will require compromise between the two sides on exchanging services,one of Indias greatest assets in the international marketplace. India has higher ambitions in the services sector,theres no doubt, Sharma said. The bilateral services agreement would be the third of its kind for India,having already signed similar agreements with South Korea and Singapore.

Among the challenges in tying up the services agreement is the dilemma of moving professionals and business people,a challenge Razak mentioned specifically. When countries deal with us as a trade partner,many fear that if they sign a services agreement,they will be over run by India,they must get over that, said a government source under a condition of anonymity.

India and Malaysia will meet for the sixth round CECA negotiations in New Delhi from July 26 to 29. Bilateral trade between the two countries amounted to $7.1 billion in 2009,with India enduring a trade deficit of approximately $2.6 billion. However,from January to April 2010,trade increased by $2.79 billion or almost 8.3 per cent over the corresponding period in 2009.