Prof Jayakumar, Excellencies and Friends,

  1. We are meeting today against the backdrop of two momentous anniversaries the 50th year of India’s Independence and the 30th year of ASEAN. Our host country Malaysia too is celebrating 40 years of independence. As our nation reflects on the past half-century, allow me, on behalf of India, to congratulate you on passing an important milestone.
  2. The Prime Minister of India, Mr. I.K. Gujral was himself to have been with you. However, our Parliament is in session and there is also an election of our Vice President which m his presence in New Delhi essential.
  3. Five significant events have taken place since you invited India to be a full dialogue partner last year. These events will bring us even closer.
  4. First, till last year ASEAN and India were only maritime neighbours. Now through Myanmar, India and ASEAN share a land boundary of over 1600 kms. This will impart a new dimension to our relationship. We felicitate Laos and Myanmar on their joining ASEAN and look forward to continuing our traditionally friendly collaboration with them.
  5. Second, the cooperative spirit of ASEAN is also proving contagious. Recently, the summit of South Asian countries pledged to deepen regional commercial and economic linkages and establish a South Asian Free Trade Area by the year 2001, India, for its part, has pledged to take and indeed has taken unilaterally, major confidence building measures in relation to fits neighbours.
  6. Third, in the Budget I presented in February this year I categorically laid out an objective for India’s trade reforms that we will reach Asian levels of tariffs by the turn of tike century and world levels shortly thereafter. Today, according to some estimates, India’s average import-weighted tariff is around 25% as compared to about 12% in East Asia and 7% in Western countries.
  7. Fourth, an Indian business delegation participated in the first-ever ASEAN business summit in Jakarta earlier this year. The ASEAN-India Business Council has identified a number of industries and sectors where cooperation between our respective private sectors can be enhanced to mutual benefit. The terms of reference for the ASEAN – India Working Group on Trade and Investment have also been approved. This will provide a further impetus to business and corporate interactions and will help establish working linkages between India and AFTA processes.
  8. Fifth, the Working Group on Science and Technology has become operational. This is an area of great promise and we are pleased that two major research and development projects in advanced materials are in the process of being implemented. More projects in biotechnology and multimedia education are on the anvil. Our hope is that the administrative approve will keep pace with the enthusiasm that has been generated amongst our scientists and technologists.
  9. Excellencies, India’s reforms are now six years old. Our macroeconomic fundamentals are sound. Foreign exchange reserves are close to $ 29 billion; of these, foreign currency reserves are nearly $ 25.5 billion, and now the challenge before us is to manage rising inflows of capital. 1996/97 has seen a GDP growth rate of 6.8%. making the average growth for three successive years 7%. Strong economic growth has come without Signs of accelerating inflation or a deterioration in the external accounts position. Debt service payments as a proportion of current account receipts are falling and this year are estimated at about 21%. Gross domestic savings this year are projected at about 26.3%- lower your own rates but considerably higher than our historical average of about 21%.
  10. There is today a firm and established consensus on the need to cut deficits, open markets, attract more foreign capital, enhance investment in the infrastructure sectors and augment outlays for the social sectors, particularly education and health. Differences remain as indeed they will in a pluralistic democracy and open society. But day-by-day, the scope of consensus is enlarging and the fact that we an a 14 party coalition has not prevented us from taking major decisions to sustain the momentum of reforms or from State governments proactively wooing investment. Allow me to highlight a few of these initiatives.
  11. We are committed to providing a larger role for private and foreign investment in the infrastucture sector. Over 4000 MW of IPP generating capacity is under construction and another 10,000 MW will, in the next two to three months, enter the construction phase. India has traditionally added 3500-4000 MW of capacity every year entirely through public investment. Public investment of this level will remain but we are working towards the addition of the same level of capacity through the private sector as well.
  12. We have announced and put in place a policy to attract private investment in the development of ports. Two ports funded and built entirely by the private sector will be commissioned by the time we meet next year. You will be pleased to know that a Malaysian company is part of the consortium that has been awarded India’s first major contract for private container terminals in the New Mumbai port. Thai investors are looking at opportunities in the development of Paradip port on the East coast. This is just the beginning.
  13. Our telecom privatisation is now well on track. By the end of the year, basic telecom service in two states – Gujarat and Madhya Pradesh – would be launched by private companies and by the middle of next year, such facilities would be available in other states as well. Cellular and value-added services are already in the private sector. We are completely deregulating the provision of Internet services, which along with India’s accession to the ITA, should be seen as a sign of our determination to be a major player on the global informatics scene.
  14. A detailed programme for the development of roads has been announced. About 4500 kms of national highways have been taken up for conversion from two-lanes to four-lanes by the year 2003. In addition, 15 BOT projects running to about 600 kms are being put up for bids and for completion by the year 2000. Two expressway projects are also being offered to private investors and I am glad to say that a Malaysian company has evinced keen interest in one of these expressways.
  15. Two other infrastructure sectors that have seen substantial changes in the last year are hydrocarbons and coal. We have already signed over 15 production sharing contracts for oil and gas exploration and production. Another 38 are on the anvil. We have set up a LNG company that is sell oppoties for expanding LNG trade between India and East Asia. The coal sector has been opened for private sector participation.
  16. The last year has witnessed a major transformation in the financial services sector. India’s first computerised securities depository is now My operational and I expect that in the next 12 to 15 months trading and settlement problems – the bane of our capital market – will be substantially eliminated. The fact that we have had some degree of political uncertainty in the past twelve the months has not deterred net FTI investment from increasing by over a billion dollars to about $ 8.4 billion presently. We now have a report containing a detailed roadmap for capital account convertibility over the next few years. Some suggestions – like those relating to overseas investments and borrowing by Indian companies – have already been put into practice. Interest rates have plummeted by 400 basis points as competition in the financial sectors has both deepened and widened. 22 of the 24 public sector banks have achieved the Basle capital adequacy norm.
  17. Our tax regime has now become comparable to the rest of the world. Personal income tax rates have been cut to 10%, 20% and 30% and the corporate tax rate has been reduced to 35%. Dispersion in excise duty has been further reduced and there is now agreement among the States and the Centre that India should move towards a VAT system.
  18. Excellencies, I have deliberately gone into some de on the initiatives that have been taken in the past year. A coalition government has been able to take reforms forward in a manner few could have imagined or even hoped. The reason for this is simple – there is, in India today, a powerful desire among the people for change; for faster growth and equality of opportunity; for a caring and responsive government, and for a new India that occupies its rightful place on the world stage. The desire for change is coming from a variety of sources. It is the result of a profound demographic transition which is seeing India growing younger and younger. It is the outcome of increasing literacy, faster urbanisation and the spread of agricultural prosperity. It is emanating from the proliferation of powerful communications media and messages. It is the consequence of the evolution of India into a multi-layered federal democracy with growing assertiveness on the part of State governments and local bodies.
  19. Excellencies, our seven focus areas of partnership are trade, investment, science and technology, tourism, infrastructure, human resource development and academic and people-to-people exchanges. We have every reason to be satisfied with the progress we have made in each of these areas. Let me now, before closing, turn to some specific proposals that we have for your consideration.
  20. First, we have proposed the establishment of an ASEAN-India Informatics Centre . The proposal is already with you. We leave the location of the Centre to you. We are pleased to note that three ASEAN countries have expressed their willingness to host the Centre. On our part, we undertake to fully operationalise such a centre within a few weeks of your decision. This will be a flagship project as far as we are concerned and I can assure you of our unstinted supports.
  21. Second, India is in dialogue on civil aviation issues with interested ASEAN partners; recently, we have concluded a bilateral agreement Singapore. I would now propose a new initiative on tourism to increase two-way traffic. We have much to offer each other m cultural and leisure tourism. To begin with, may I request an ASEAN focal point for tourism cooperation with India be identified to work out a detailed plan of action. The ASEAN-India fund could be used to formulate and implement such a detailed programme.
  22. Third, we are looking forward to the completion of the ASEAN Secretariat study on cooperation in human resource development between us. In addition, I suggest that the ASEAN-India Fund be used to commission a study on how to strengthen and expand India study centres in ASEAN countries and East Asia study centres in India. It is essential to forge long-term academic links between our universities and technical institutions. There have been discussions on an exchange programme between the Institute of South-East Asian Studies of Singapore and Jawaharlal Nehru University in New Delhi. I hope we will be able to evolve a concrete programme soon under the aegis of the ASEAN-India Fund. You will be pleased to know that we inaugurated the ASEAN India Lecture series in New De with a talk by Dr. Mahathir Mohamad in December 1996. The second lecture by a distinguished Philippine academic was given in June 1997. 1 would also like to reaffirm that we are keen to extend technical and other assistance to Vietnam, Laos and Myanmar.
  23. Fourth, for some reason there is an anomaly between the visa facilities offered by India to A SEAN countries and that priovided by the ASEAN nations to Indian nationals. The ASEAN-India Business Council has also drawn attention to this and has asked some ASEAN-India arrangement for the expeditious grant of bussiness visas to Indian professionals be arrived at. I can appreciate your concern on immigration but at the same time I am sure you will agree with me that genuine travellers and business person need to be treated differently and visas granted to them expeditiously.
  24. Excellencies, India looks at East and South-East Asia as an integral part of her larger security framework. We are gratified that the ASEAN and other ARF partners recognise in equal measure India’s role in evolving a security perspective for the Asia-Pacific Region as a whole, India has gained immensely from its participation in ARF activities relating to CBWs, maritime search and rescue, peace-keeping, nonproliferation preventive diplomacy and disaster management. Political ties have deepened, Economic have been widened. It is only natural that our strategic relationship also undergoes a change. India desires peace and an environment that will enable her to concentrate single- mindedly on her developmental challenges. We see our growing involvement with the ARF as an essential component of a strategy that will bring peace to our nations and sustain that peace through dialogue, interaction, discussion and negotiation based on give and take.
  25. India is an Asia country. We are proud to belong to Asia, a continent that has emerged as the fastest growing region in the world. The Asian Development Bank in its recently-released study on Emerging Asia has concluded that given the right policy environment, So Asia is potentially the region whose growth rate will be the fastest in the next years. There is every likelihood of India emerging as the fourth largest economy by the year 2015 by which time three of the world’s four largest economies will be Asian. This will mean a better quality of life and prosperity for over a billion people of India and also create innumerable opportunities for our friends in this region and elsewhere. We seek your cooperation and participation in the exciting and challenging task of creating a new India.