India may open skies to more flights from Asean

India could soon allow airlines from Asean to operate unlimited flights between their capitals and New Delhi. Senior government officials say flights to other cities including Mumbai, Chennai and Kolkata are also a possibility.

The initiative will update the 2003 India-Asean open skies agreement that allows carriers to operate daily flights to various cities. They are also allowed to operate unlimited flights to 18 tourist destinations including Kochi, Thiruvanathapuram, Kozhikode, Tiruchi, Port Blair and Visakhapatnam.

India is likely to follow China’s example in liberalising its air services agreement with the 10-country Asean group, officials said. Such international agreements are generally on a reciprocal basis, which means Indian carriers will also be allowed to operate more flights to the Asean region.

A clear picture on the roadmap for the possible opening and the time-frame could emerge at a meeting between Asean and Indian officials to be held soon.

The acceptance of the proposal is unlikely to go down well with Indian carriers. Airlines from India often complain that international airlines take away Indian traffic bound for third countries instead of carrying passengers from India to the country to which the airline belongs. This is affecting their profitability.

Singapore Prime Minister Lee Hsien Loong in July urged India to further liberalise its air services agreement to help achieve the full trade potential between the two countries. He also expressed the hope that the investment and services agreement between India and Asean as part of the Free Trade Agreement (FTA) will be concluded soon.

Two-way trade between Asean and India in fiscal 2011-12 ending last March 31 was worth US$80 billion.

“One priority is to conclude the investment and services agreement of the India-Asean FTA,” said Mr Lee. “The goods agreement is concluded, but the investment and services agreement is still being negotiated. It has been a long process and we hope it can be settled, and settled before long.”

Singapore is India’s largest trading partner among the Asean with bilateral trade of $23 billion and the second biggest source of foreign direct investment inflows into Asia’s third-largest economy.

Mr Lee said he hoped that the air transport agreement could be settled quickly. “Ideally, in time for the ceremonial Asean-India summit in December. If we get these agreements done, then we open up our services industry and boost investments and pave the way for integration in many other areas.”

At the annual Asean-India ministerial meeting in the Cambodian capital, India’s external affairs minister S.M. Krishna also highlighted the need to swiftly conclude the FTA in services and investment and expansion of communication links with the member states of the Asean, considered one of the world’s fastest growing regions.

The India-Asean Tarade in Goods (TIG) Agreement was signed in August 2010 after six years of negotiations and it came into force on Jan 1 last year.

Services and investments could not be included in that agreement as the two sides failed to reconcile their differences in time and it was decided to have a separate pact on these sectors.

India views Asia as a global engine of growth and is keen to expand cooperation with Asean — particularly in the sectors of information and communication technologies, road development and maritime security.

Sourced: bangkokpost