~It is a great pleasure to be with you this morning for this first India-ASEAN Business Summit. It is a valuable forum for networking and exchange of business experiences between policy makers and business leaders from ASEAN and India. This interaction, both here and in Hyderabad, should contribute important inputs for the India-ASEAN Summit in Cambodia, just over two weeks from now.

Economic co-operation is a crucial pillar of the India-ASEAN relationship. As in the case of the India-European Union dialogue, I believe that the Business Summit should become a traditional curtain raiser for the India-ASEAN Summit. ASEAN already has a long tradition of industry-government partnerships. We should inject such joint endeavours also into the India-ASEAN relationship.

I extend to our ASEAN guests a very warm welcome to India. I specially appreciate the presence amongst us of the Deputy Prime Minister of Thailand, and the distinguished Ministers from Cambodia, Laos, Malaysia, Singapore and Vietnam. Later today, the Prime Minister of Malaysia will address a special session of this Summit. There is impressive representation from business and industry of all the ASEAN countries. The fact that so many of you have taken time off from your busy schedules to be here, speaks volumes for the commitment to India-ASEAN economic relations in ASEAN business and governments.

India and Southeast Asia have shared much in centuries past. The varied history of our interaction has permeated our societies and enriched our cultures. This includes a rich sea-faring tradition, which brought us in close contact through trade.

In more recent times, our paths diverged as we followed different models for development. The Cold War also cast a long shadow. We remained friendly neighbours, but with differing political outlooks and economic orientations.

The passing of the Cold War and the launch of India’s economic reforms about a decade ago, dramatically altered this picture. We have developed a common interest in a multi-polar, plural world. Our political dialogue and economic interaction have intensified. India became a sectoral dialogue partner of ASEAN in 1992, full dialogue partner in 1995, and a member of the ASEAN Regional Forum in 1996. The commencement of regular Summit-level India-ASEAN dialogue next month will be a new watershed in this growing relationship.

India’s geographical proximity to ASEAN is often not grasped fully. We have maritime borders with Thailand and Indonesia. Our Andaman and Nicobar Islands are very close to some ASEAN countries. In recent years, with the expansion of ASEAN, we have moved even closer. We now share a land border of about 1600 kilometres with ASEAN in Myanmar.

Friends,

It is often said that the 21st century will be the Asian century. This is not mere rhetoric. The centre of gravity of the world is shifting gradually, but decisively, towards the Asia-Pacific. In one form or the other, Asia is set to dominate the politics and economics of this century.

We have a sound, objective basis for this belief in Asia’s future. Asia has the population numbers and the market sizes. It has a growing number of urban centers with world-class infrastructure. Fundamentally, however, it is Asia’s human capital, which is the core reason for this optimism. Our rapidly expanding middle classes boast a wealth of professional skills, scientific talent, and abundant business enterprise. The skills and work ethic of our industrial workers is legendary.

Asia’s strengths are evident in the new economy. Our countries missed the Industrial Revolution, because many of us were under colonial domination at that time. But we are today at the forefront of the Knowledge Revolution. From information technology to genetics, from pure science to biotechnology, Asian professionals and scientists have won worldwide respect. Our proficiency in the knowledge-based economy has given us the unique opportunity to accelerate our progress and to catch up with the developed countries in a foreseeable timeframe.

Friends,

India and ASEAN have a historic opportunity today to promote this process to mutual benefit by exploiting the synergies between them.

Trade is the backbone of any economic relationship. Our two-way trade of less than 10 billion dollars does not do justice to our population of one and a half billion people producing a trillion and a half dollars worth of goods and services annually. Our businesses need greater awareness of opportunities. The two-way flow of information has to be accelerated. This requires active relations between our chambers of commerce, and regular exchanges of business delegations.

Over the past decade, ASEAN has made rapid progress towards internal integration through the ASEAN Free Trade Area. There are other existing and potential regional arrangements in Asia-Pacific. I believe India and ASEAN have a mutual interest in the working towards beneficial preferential and free trade arrangements. We need to look at conventional, as well as innovative mechanisms, to promote economic integration. India is already committed to reducing its peak tariff rates to East Asian levels within the next three years. We are continuously introducing measures for improving market access, harmonization of standards and simplification of documents. We seek reciprocal measures from our partners. We see a Regional Trade and Investment Area as a near-term objective of India-ASEAN economic relations.

The present global economic slowdown provides an immediate context for our closer regional integration. The western economies which have been the mainstay of Asia’s foreign investment and export-led growth today face uncertain prospects of recovery in the near future. Meanwhile, India continues on an uninterrupted growth trajectory averaging an economic growth of about six percent. We should, therefore, build on the complementarities between the Indian and ASEAN economies. This can also cushion us against the impact of a downturn in external markets.

Each of our countries has achieved expertise and even dominance in certain areas of technology. It is crucial that we cooperate by complementing our respective strengths, rather than undercutting each other.

By pursuing these objectives, India and ASEAN can become mutually reinforcing engines of growth and development.

Our countries have benefited from the vast expansion of trade, investment and economic cooperation in the wake of globalization. But we also note its uneven benefits, among and within nations. Globalization cannot be sustained as a one-way quest for developing country markets by the products and capital of the developed world. We need greater equity and a larger share of the fruits of globalization for developing countries. These socio-economic goals can be promoted through sub-regional cooperation which pays special attention to the needs of less developed areas in a region. In this context, India attaches the greatest importance to the Initiative for ASEAN integration. We have launched human resource development programmes in Cambodia, Laos, Myanmar and Vietnam under this initiative. We would be happy to expand into more development projects in these countries. Specifically, we have offered our assistance for a communications network involving highways, railways, river navigation and port facilities.

It is with the same perspectives that India has supported Mekong-Ganga Cooperation bringing together Cambodia, Laos, Myanmar, Thailand, Vietnam and India. We are also implementing another sub-regional initiative for a road link connecting India, Myanmar and Thailand.

In all these projects, there is scope for participation by private business, along with the governments.

India has also consistently supported such cooperative ventures to promote development within SAARC. Although we have been foiled in this effort by unrelated political obstacles, we are now focussing our attention on sub-regional cooperation within SAARC, as well as regional and sub-regional cooperation with groupings like ASEAN. The sub-continental size of India’s market and the wealth of its resources make it a credible economic partner for regional and sub-regional organizations.

One of the strengths of the economic bonds between India and ASEAN is that investment flows have been in both directions. Whereas India’s links with Europe and America have been mainly as a recipient of investment, Indians have been investing in South-east Asia over the past four decades. Indian or Indian-origin entrepreneurs today own the world’s largest palm oil refinery in Malaysia, one of the largest carbon black manufacturing units in Thailand and a number of large textile units in Indonesia. These examples could be multiplied. All these investments took place well before India’s economic liberalization in the nineties. The pace of Indian investment in ASEAN is poised to increase rapidly with our liberal policy framework combined with the obvious advantages of the ASEAN Free Trade Area.

A major pillar of the economic success of several ASEAN countries is their excellent infrastructure. In power, urban municipal services, airports and roads, ASEAN countries are well-equipped and their companies globally competitive. India’s relative weakness in this sphere provides a further complementarity between us. I am happy that this Summit will pay special attention to identifying opportunities of mutual interest in this sector.

I would like to briefly dwell on the future direction of India’s economic reforms. Very recently, while talking to the European business community, I had referred to the current fashion of comparing economies to creatures like dragon, tigers and elephants. Like an elephant, the Indian economy may be somewhat slow to gather momentum but when it does so, it is unstoppable and irreversible. I assured our European business friends that such hiccups as they may see in our liberalization process, are only the democratic process of reconciling divergences and achieving consensus. Our reform process continues to target high growth with balanced and equitable development. Our ambitious GDP growth target of 8% exhorts us to stay on this path. There can be no looking back.

I would also like to assure my ASEAN business friends that we are making every effort to make our policies more investor friendly, using e-governance to tackle the problems of cumbersome procedure, paper work and bureaucracy. We hope a transformation will soon be evident.

Friends,

My remarks today would not be complete without a reference to the barbaric terrorist act in Bali last week. This inhuman act calls for the harshest condemnation. Your Summit also cannot ignore the negative impact of such terrorist acts on business climate in the affected country and in the region.

I had the pleasure of visiting Bali last year and of savouring its unique cultural charm. Our hearts go out to the shockingly large number of innocent tourists and local people, who perished in the bomb attack. We in India have been the victims of such terrorism for a long time.

Governments alone cannot effectively fight this grave danger to world peace and human civilization. The time has come to broad base the struggle against terrorism and religious extremism. The business community in India and the ASEAN region will have to play an active role in this struggle.

The diversity and openness of our societies are the proud features of both India and ASEAN. We are home to major religions of the world, and accommodate diverse ethnic, cultural, artistic and spiritual traditions. We must preserve this precious heritage of pluralism. It helps us to mediate conflict with compassion, understanding and democratic dialogue. Needless to add, this unique ability of our societies also has obvious economic and business spin-offs. Let us turn this shared heritage into a strong weapon against terrorism and the mindset that breeds it.

I wish you productive deliberations in New Delhi and in Hyderabad. I hope your work will lead to concrete business and exchanges and tie-ups. I also wish you success in making this dialogue a productive institutional mechanism to enhance the economic component of the India-ASEAN Summit.

Thank you.~