ASEAN-India Services and Investment FTA Inches Closer to Implementation
The ASEAN-India Free Trade Agreement (FTA) in Services and Investment is one step closer to implementation following approval by Thailand’s Ministry of Commerce to accept the terms outlined in the region-wide agreement.
Thai investors had previously rejected several articles of the agreement, putting pressure on their government to negotiate further with India before agreeing to implement the FTA.
In response to these concerns, Thailand’s National Council for Peace and Order announced last month that agreeable terms had been reached and that it would endorse the agreement during the ASEAN Economic Ministers meeting, scheduled to take place later this month in Myanmar.
Under the new terms, Indian investors operating in Thailand will be limited to a 49 percent ownership stake in Thai companies.
Led by India’s former ruling party, the United Progressive Alliance (UPA), formal negotiations for the ASEAN-India Free Trade Agreement in Services and Investment were concluded in 2012 and endorsed by the ASEAN Economic Ministers in 2013—but the agreement has faced considerable opposition within the ASEAN bloc, with Thailand, Indonesia and the Philippines yet to individually ratify the deal.
Among these countries’ sticking points was the UPA-endorsed stipulation that Indian companies be allowed to hold a 51 percent majority stake in multi-brand retail FDI projects involving the ASEAN member nations. This number has since been reduced to 49 percent in hopes of reengaging the holdout nations.