India-Asean services pact still on track

THE assurance by Indian Commerce and Industry Minister Nirmala Sitharaman on Wednesday that her country would honour its commitment to the Asean region and is ready to sign a services and investment pact should come as a relief. This announcement came a day after she abruptly cancelled her visit to Myanmar for the India-Asean economic ministers meet where she was supposed to sign the deal.

India is already facing criticism for scuttling the World Trade Organization's (WTO) Trade Facilitation Agreement. Understandably, the no-show by the minister at an India-specific, three-day meeting in Myanmar raised concern about the country's commitment to the pact and to a global trade regime. Ms Sitharaman said last-minute domestic compulsions prevented her from attending and the official line is that she had to stay back due to the launch of a financial-inclusion scheme to provide every household with a bank account and insurance cover. However, it seems unlikely that such a scheduling mix-up could have happened since the meeting in Myanmar was planned quite a while ago and would have been factored in.

It is more likely that the National Democratic Alliance (NDA) government of Prime Minister Narendra Modi wanted to have a closer look at the ramifications of the deal which was negotiated and agreed to under the government of the former prime minister, Manmohan Singh. India and Asean already have an FTA (free trade agreement) covering goods.