INDIRECT TAXES
| Services gains seen as India, Malaysia enter pact today Thu, 17 Feb 2011 21:12:45 GMT |
| NEW DELHI: India's services sector will finally gain greater access to Malaysia's growing market as the countries sign a comprehensive trade liberalisation agreement on Friday. The pact will prop up bilateral trade in goods to an estimated $15 billion by 2015 and smoothen investment flows. With the 10 member Asean grouping delaying inclusion of services in the free trade agreement signed with India last year, the deal with Malaysia is part of the country's strategy to access the services market of the region through the bilateral route. "We already have a comprehensive deal with Singapore that covers services and now we will have one with Malaysia. As similar deals with Indonesia and Thailand are also in the pipeline, our services sector will soon have access to all major markets in the region," a commerce department official told ET. India's gain from the comprehensive economic partnership agreement ( CEPA )) will be in areas such as information technology, health, education and telecom. Markets will be opened up for professionals wanting to practice in the country and also investors who want to set up commercial presence there, the official said. Malaysia would allow longer duration visas, easier renewals and relaxation of criteria such as economic needs test (ENT), wherein a company hiring a foreigner has to prove that there is an economic need for it which can't be fulfilled by domestic workers. Malaysia is likely to gain concessions for its tourism sector, one of its main services export earner . It will also gain greater market access for commodities such as palm oil, as both countries have agreed to go beyond the India-Asean agreement in the area of goods. Both sides will also have easier provisions for establishment of bank branches. While the India-Asean FTA seeks to eliminate duties on more than 4,000 products by 2016, it has allowed both sides to protect about 450-odd products from tariff cuts. "We will also have a negative list of products in the India-Malaysia CECA, but it will be much smaller," the official said. Malaysia is India's twelfth largest trading partner, although the global slowdown brought down bilateral trade to $7 billion in 2009 from a peak of $10.5 billion in 2008. The CECA will be signed by Malaysian international trade and industry minister Mustapa Mohamed and commerce and industry minister Anand Sharma . |
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