Services tops agenda in FTA with Malaysia.

NEW DELHI: India is trying to extract a good offer from Malaysia on services in the bilateral free trade pact it is negotiating with the country, hoping to go beyond what it might get under the India-Asean agreement.

Malaysia has the second largest English speaking population in the Asean block and offers a lot of potential for Indian service providers.

“In the Indo-Malaysia negotiating group meeting last month-end, we made it clear that our bilateral agreement could work out only if we get a good deal in services,” a commerce department official told ET.

More than a fourth of Malaysia’s population speaks English (about 74 lakh). Though Philippines has a greater number of English speaking people in the Asean region, Malaysia has more job opportunities as it is economically more developed. Export of services from India to Malaysia is limited to areas such as IT, tourism and construction services.

“There are opportunities for Indian professionals in a number of areas, including health, education, architecture and chartered accountancy,” said Research & Information System for developing countries senior fellow Ram Upendra Das.

India is hopeful of getting a better deal in services in the bilateral with Malaysia than in the comprehensive economic cooperation agreement or CECA being negotiated with Asean. “It is much easier to work out a favourable deal with a single country than a number of countries together,” the official said adding that give and take can be much better when the number of participants are less.

India wants to enter into mutual recognition agreements with the country in a number of areas so that qualified professionals in India can go and practice in the country without seeking additional degrees there.

Malaysia is India’s 12th largest trading partner. The global slowdown brought down bilateral trade to $7 billion in 2009 from a peak of $10.5 billion in 2008.

Malaysia, on its part, wants more access to India’s market in goods, including farm produce such as palm oil and rubber.

Increased access for certain farm products from Asean was a sticky point in the FTA negotiations between India and Asean which kicked off in the beginning of the year.

Malaysia and India are hopeful of concluding the negotiations, which would include trade in goods, services and investment, before prime minister Manmohan Singh’s likely visit to Malaysia in October this year.

Source : The Economic Times