Prime Minister of India - Dr. Manmohan Singh

PM's keynote address at special leaders dialogue of ASEAN Business Advisory Council

"I am indeed very happy to have the opportunity to address such an important forum as yours. I thank Dato Ajit Singh for the kind words that he has spoken about me and my country. He is an old friend and I believe it is customary on such occasions to praise one's friends. But I have known him for many-many years when he was in the Malaysian Civil service, then he rose to head the ASEAN Secretariat. We have great admiration for him in our country as a great friend of India and a great ambassador of goodwill for ASEAN. I take his opportunity to thank the ASEAN Business Advisory Council for inviting me to outline our vision of the India-ASEAN partnership. I assure you we take this partnership very seriously and we are determined to carry this partnership to an ever-expanding horizon.

Some of you might recall that in 1992, our Government launched India's "Look East Policy". This was not merely an external economic policy, it was also a strategic shift in India's vision of the world and India's place in the evolving global economy. Most of all it was about reaching out to our civilizational neighbours in South East Asia and East Asia. I have always viewed India's destiny as being inter-linked with that of Asia and moreso South East Asia. I reiterate India's commitment to work with ASEAN and East Asian countries to make the 21st century truly an Asian century.

India's share in the global flows of goods, services, knowledge and culture has grown exponentially in the past decade. Today, our external economic profile is robust and re-assuring to investors, at home as well as abroad. After registering an 8 per cent rate of growth in 2003-2004, our economy recorded upwards of 7.0 per cent growth for two years in a row. Indeed, in the first half of the current fiscal year, we have touched 8.5% and it is our ambition in the next three-four years to raise India's growth rate to the range of 9 to 10 per cent per annum. In the past year and a half, our policies relating to investment, taxation, foreign trade, foreign direct investment, banking, finance and capital markets have evolved to make Indian industry and enterprise more competitive globally. We have launched a massive program for rural renewal which will upgrade rural infrastructure and incomes and thereby expand the domestic market. New policies are enabling public-private partnership in the modernisation of roads systen, railways system, ports, airports, power and the entire urban infrastructure.

Today, I am happy to report to you that India is a vibrant marketplace. Our entrepreneurs are investing overseas successfully. Businesses from abroad, including from ASEAN, Japan and the Republic of Korea, find India a productive and profitable business destination. Similarly, the gathering momentum of India-China relations is visible in the expansion of our bilateral economic ties. The process of engagement in the Asian region has truly taken off. I am confident it will be self-sustaining, enhancing direct contact between peoples and civil societies of the region.

The challenge that faces all of us today is to create and maintain a regional and international environment that enables us to attain and sustain high rates of economic growth. We must create opportunities for entrepreneurship to flourish not only locally, but also regionally and globally. Economic activity cannot be confined to national borders; it must be channelled to fuel growth in each other's countries. Regional trading arrangements have become important building blocks of multilateralism in an increasingly globalized world that we live in.

Therefore, India seeks closer economic interaction with ASEAN. We are committed to bringing down our tariffs to levels prevalent in ASEAN countries, to dismantle unwanted barriers and to expand global capital flows. We must walk this road together with ASEAN, so that enterprises in our countries find it a mutually beneficial process, not a hurtful one. There may be losers, and there will certainly be gainers, but on the whole, we will obtain a win-win outcome and that should be our ambition to work jointly.

In this context, India has concluded a Framework Agreement on Comprehensive Economic Cooperation with ASEAN in 2003 and with Singapore more recently, a few months ago. We are developing a similar model with Thailand, and are setting up a Joint Study Group for conclusion of Free Trade Agreements with Malaysia, Indonesia, Japan and the Republic of Korea. We are also examining ways to develop regional trading arrangements with our great neighbour - China. These are all milestones on the road to the eventual creation of an Asian Economic Community, or the 'arc of prosperity' that I envisage to become a reality in the early part of the 21st century.

I believe the objective basis for the economies of our region to come together already exists. The subjective desire to create an East Asian Community, bringing together ASEAN, China, Japan, Korea, and also Australia and New Zealand, is manifest. Like the North American Free Trade Area, and the expanding European Union, a Pan-Asian FTA will be a dynamic, open and inclusive association of the countries of our vast region. This will not be easy, and it cannot be done in a day. There will be sceptics. But for believers, it is eminently possible. I am convinced that this is the only way to move forward and India wishes to associate with other like-minded countries to make it happen.

I believe that the East Asian Community is a natural extension of the ASEAN-India engagement process. The India-ASEAN Free Trade Agreement can become the first step in the process. The limited Free Trade Area is a beginning but we must ensure that it leads to explosive growth - both in trade and investment.

The essence of the idea is to build up closer linkages among India and the countries of the ASEAN. This we believe can be done through identifying and drawing upon each other's strengths. The key to the future is the development of new synergies. In the 1960s, synergies between scientists in India and scientists at the International Rice Research Institute in the Philippines contributed to the dawn of Green Revolution in India. This resulted in filling India's granaries with foodgrains. We have both benefited from each other.

Today India has developed expertise in high technology areas such as Information Technology, Space, Biotechnology and Pharmaceuticals. We are ready to share our skills in these sectors with our partners in ASEAN and other developing countries. Each of these sectors presents its own opportunities for India-ASEAN cooperation.

With the growing recognition of complementary strengths, India is developing increasing links to ASEAN and East Asian production networks. These links relate to the knowledge intensive segments of the value chain. They include software development, R&D, engineering and designing and high quality manufacturing, and are invaluable to the furthering of the process of integration.

The best aspect of our renewed engagement is that both of us recognise now that we have something to offer one another. The ASEAN region has an abundance of natural resources and significant technological skills. These provide a natural base for the growth of synergies and integration between ASEAN and India - in both trade and investment. I believe we can double the present level of bilateral trade by 2007, reaching a target of US$30 billion by then.

I am therefore happy that the inaugural meeting of the ASEAN India Business Council was held in May 2005 in this very beautiful city. The Council must be active to exert pressure on Governments to move faster than they are wont to do. It must reach out to all stakeholders in India and ASEAN member countries to mobilise opinion in favour of greater regional interaction. I look forward to working with leaders in this region for the future success of India- ASEAN cooperation and that of the East Asian community. On behalf of the Government of India, I pledge myself to work with all like-minded countries and like-minded friends to make the future happening".